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H&M has seen operating profit hit SEK 725m (£56.4m) in its first quarter of trading, up from SEK 458m (£35.6m) the prior year, boosted by the earnings of second-hand platform Sellpy.
Sellpy, which is one of Europe’s largest second-hand platforms, has been consolidated into the group in the first quarter, contributing around SEK 1 billion (£77m) of earnings in the period.
In the quarter ended 28 February, group sales rose by 12% to SEK 54,872m (£4.82bn), with a rise of 3% in local currencies. Excluding Russia, Belarus and Ukraine, this would be an increase of 16% in SEK and 7% in local currencies.
Elsewhere, the group’s portfolio brands – COS, Monki, Weekday, & Other Stories and Arket – developed “strongly” with a sales growth of 19% in SEK and 11% in local currencies, as they made an “increasingly important contribution to the group’s growth”.
For the H&M brand, investments in areas such as tech, AI and the supply chain reportedly improved precision and faster response times. The group also noted that H&M womenswear was attracting “more and more customers” in particular.
Overall, despite a “challenging” market, the group said external factors that influence purchasing costs have continued to improve. It added that work on its cost cutting and efficiency programme is “proceeding at full speed”, with changes made in recent years now “starting to have an effect”.
The group added it has a “robust” financial position, stable cash flow and a well-balanced inventory, and that its increased level of investment across the group makes it “well placed for continued sustainable and profitable growth”.
Helena Helmersson, CEO, said: “The H&M group continues to stand strong with a robust financial position, stable cash flow and a well-balanced inventory. The start of the year shows that we have taken further steps towards the goal of achieving an operating margin of 10% already next year.”
Looking ahead, sales in local currencies for March are expected to increase by 4% compared with the same period last year.
H&M noted that the start of the spring season has been delayed in many important markets as a result of cold weather, but that spring collections have been well received in places where the weather has warmed up.
