Swedish firm H&M's net sales soar 6% in FY23

Portfolio brands experienced a notable sales growth of 15 per cent in SEK and 9 per cent in local currencies during FY23. The company's gross profit also saw an increase, rising by 7 per cent to SEK 120,896 million, up from SEK 113,370 million. This improvement led to a gross margin of 51.2 per cent, compared to 50.7 per cent in the previous year, H&M said in a press release.

Operating profit, including allocation to the H&M Incentive Program (HIP), increased significantly to SEK 14,537 million, up from SEK 7,169 million, representing an operating margin of 6.2 per cent. Excluding the allocation to HIP, operating profit was SEK 14,714 million, maintaining the same operating margin of 6.2 per cent.

The result after tax for FY23 showed an increase of 145 per cent, reaching SEK 8,723 million, up from SEK 3,566 million. This translates to earnings of SEK 5.35 per share, compared to SEK 2.16 in the previous year.

“In FY23, we took important steps towards our long-term goals. Our improvement work in the supply chain and continued normalisation of the external factors that influence purchasing costs resulted in a stronger gross margin. A focus on cost control, profitability and increased inventory productivity also contributed to improved cash flow that is financing increased reinvestments in the business,” said Helena Helmersson, CEO.

In the fourth quarter of FY23 (Q4 FY23), H&M's net sales were SEK 62,650 million, slightly up from SEK 62,433 million in the same period last year. Excluding Russia and Belarus, the increase was 3 per cent in SEK, although there was a 1 per cent decrease in local currencies.

The fourth quarter also saw an 8 per cent increase in gross profit to SEK 33,657 million, resulting in a gross margin of 53.7 per cent. Operating profit for Q4, excluding allocation to HIP, was SEK 4,509 million, a substantial improvement from SEK 821 million, equating to an operating margin of 7.2 per cent. Including HIP allocation, the operating profit was SEK 4,332 million, with an operating margin of 6.9 per cent.

The result after tax in Q4 improved to SEK 1,576 million, a significant turnaround from a loss of SEK -864 million in the previous year. This corresponds to earnings of SEK 0.97 per share.

Fibre2Fashion News Desk (DP)