In 2019 the H&M group plans a net addition of 175 new stores; 50% shall consist of newer brands

by Textile Quotient News Desk
1 Feb 2019

H&M’s online markets are now on the new platform. Stronger collections and increased full-price sales mean that for the first quarter 2019 the company expects markdowns to be around 1 percentage point lower and a continued improvement in the inventory situation compared with the previous quarter.

Online and physical stores are being increasingly integrated, while in parallel the rollout of H&M’s online store continues. Today H&M online is represented in 47 markets and during 2019 Mexico will be added as well as Egypt that will open via franchise.

In 2019 the H&M group plans a net addition of 175 new stores, of which almost half will consist of newer brands.

The H&M group’s net sales, increased by 5 percent to SEK 210,400 m (200,004) in the financial year 2018. In local currencies, net sales increased by 3 percent. The ongoing transition work contributed to gradually improved sales development and increased market share in most markets during the second half.

The group’s online sales continued to develop very well during the year. Online sales amounted to approximately SEK 30 billion, an increase of 22 percent, thereby making up for 14.5 percent (12.5) of the group’s total sales. In local currencies the increase was 21 percent.

Gross profit amounted to SEK 110,887 m (108,090). This corresponds to a gross margin of 52.7 percent (54.0). Profit after financial items amounted to SEK 15,639 m (20,809). Profit after tax amounted to SEK 12,652 m (16,184), corresponding to SEK 7.64 (9.78) per share.

Net sales in the period 1 December 2018 to 28 January 2019 increased by 4 percent in local currencies compared to the corresponding period the previous year.

Karl-Johan Persson, CEO remarks, “It has been a challenging year for H&M group and the industry but after a difficult first half, there are signs the company’s transformation efforts are beginning to take effect. Improved collections generated better full-price sales and lower markdowns towards the end of the year. This gave us confidence to accelerate our transformation plans in the fourth quarter with a particular focus on the upgrade of our logistics systems. Inevitably resulting in increased costs but will lead to a range of improvements for customers.”

Three new fulfilment centres with a total logistics area of around 230,000 square metres were opened during the fourth quarter, providing increased capacity – particularly for online sales.

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