H&M sales rose 7 per cent in local currencies during the first six months of the financial year. But profit failed to follow suit.
Converted into Swedish kronor, H&M sales rose by 5 per cent to SEK 104.9 billion, (US$12.176 billion).
Karl-Johan Persson, CEO, said the sales increase in March and April was significantly below plan, negatively affected by cold spring weather in many markets. In May, sales were much better with an increase of 9 per cent.
After tax profit was SEK 5.357 billion, (US$621.4 million) down 17 per cent year-on-year.
“Profits in the second quarter have been affected by a continued negative US dollar effect, but also by increased markdowns and the costs of our long-term investments. The fact that the sales increase in the quarter was below plan, naturally also had an impact on profits,” he said.
“It has been a challenging half-year for fashion retail in many markets, but we have great confidence going forward and are continuing to develop our offering further within all our brands.”
H&M has opened nine new online markets so far this year – in Slovenia, Croatia, Estonia, Latvia, Lithuania, Luxembourg, Ireland, Japan and Greece. Canada and South Korea will follow later this year.
The fashion retailer has more than 4000 physical stores in 62 markets with plans to add 425 more this year. New markets this year are Puerto Rico, New Zealand and Cyprus, while Colombia will be one of four or five new destinations next year.
