H&M H1 profits beat expectations despite sales dip

H&M has revealed that its operating profit increased to SEK2.077bn (£155m), up from SEK725m (£54m) despite net sales decreasing to SEK53.6bn (£376m) during the first quarter of the year ended on 29 February 2024.

The group has said that sales from 1-25 March increased by 2% in local currencies compared with the same period last year. 

CEO Daniel Ervér said: “Development continued in the right direction in the first quarter with an improved gross margin and operating profit, lower inventory and strong cash flow. Our top priority is to continue improving the customer offering, the store experience and the supply chain in order to increase sales.”

The retailer has today (27 March) also published its sustainability report for FY23, which includes a 22% reduction in greenhouse gas emissions, a 55% plastic packaging reduction and an 85% of recycled or sustainably sourced materials. 

In addition, the group has also announced the appointment of Helena Saxon as new board member. 

Leyla Ertur, head of sustainability, H&M group, said: “As the world faces significant social, environmental and economic challenges, continuing to deliver on our business idea of offering fashion and quality at the best price in a sustainable way and staying committed to our journey towards a more sustainable and circular fashion industry is more important than ever.”

Ervér added: “We continue to plan our business with respect for a challenging situation in the world around us where consumers remain affected by inflation and high interest rates. In this situation our customer offering is more relevant than ever. Our top priority is to strengthen sales, and our target of a 10% operating margin for full-year 2024 thus remains in place.”