Sweden's H&M's net sales soar 9% in H1 FY23

Despite the increase in sales, the group's operating profit remained relatively stable at SEK 5,466 million, compared to SEK 5,446 million in H1 FY22. The operating margin was slightly lower at 4.9 per cent, down from 5.3 per cent. The results for the first half were adversely affected by rising raw material and freight costs, a robust US dollar, elevated energy costs, and the implications of ceasing operations in Russia, the company said in a press release.

H&M’s gross profit grew to SEK 56,224 million from SEK 54,106 million in H1 FY22, reflecting a gross margin of 50.0 per cent, a drop from 52.2 per cent in the prior year. Post-tax results yielded SEK 3,828 million, translating to SEK 2.35 per share, a slight decrease from SEK 3,899 million or SEK 2.36 per share in H1 FY22.

The company's cash flow from operating activities for H1 FY23 came in at SEK 12,485 million, a small drop from SEK 12,591 million in the corresponding period last year. The group's financial net cash amounted to SEK 7,700 million, down from SEK 16,313 million in H1 FY22.

In terms of the second quarter of FY23, H&M Group reported a 6 per cent increase in net sales to SEK 57,616 million, with gross profit rising to SEK 30,338 million. However, operating profit for Q2 fell to SEK 4,741 million, a decline from SEK 4,988 million in Q2 FY22.

Notably, portfolio brands performed well in the second quarter with a 17 per cent increase in sales in SEK and a 12 per cent surge in local currencies. However, stock-in-trade saw a 20 per cent currency-adjusted decrease compared to the previous year.

“With the second quarter behind us we can conclude that we have taken a number of further important steps towards our goals. We increased sales in many markets despite reduced purchasing power and unfavourable weather conditions compared with last year. The summer collections have been well received and the third quarter has got off to a good start. The conditions for increased growth as well as profitability continue to develop in a favourable direction,” said Helena Helmersson, CEO.

Fibre2Fashion News Desk (DP)