H&M posts improved operating profit in Q1

First quarter net sales at the H&M group declined to 53,699 million Swedish krona, while gross profit increased by 7 percent to 27,655 million Swedish krona, corresponding to a gross margin of 51.5 percent.

The H&M group’s sales from March 1 to March 25, 2024 increased by 2 percent in local currencies compared with the same period the previous year.

Operating profit for the quarter increased to 2,077 million Swedish krona, corresponding to an improved operating margin of 3.9 percent. Adjusted operating profit amounted to 2,091 million Swedish krona, corresponding to an improvement in profit of 2,365 million Swedish krona.

The company’s result after tax increased to 1,201 million Swedish krona, corresponding to 0.75 Swedish krona per share.

“Development continued in the right direction in the first quarter with an improved gross margin and operating profit, lower inventory and strong cash flow,” said Daniel Ervér, H&M CEO in a statement.

At the annual general meeting to be held on May 3, 2024, H&M’s board plan to propose a dividend of 6.50 Swedish krona per share, to be paid in two instalments.

“We are refurbishing around 250 stores globally in 2024, including in New York, London, Berlin and Stockholm. The quarter’s sales gradually improved during February with well-received Spring collections, which is a positive sign that we are on the right track. Our top priority is to strengthen sales, and our target of a 10 percent operating margin for full-year 2024 thus remains in place,” Ervér added.