Karl-Johan Persson, Board Member of H&M Foundation. Credit: H&M Group
Ticker

H & M Hennes & Mauritz AB Full-year report

“It has been a challenging year for H&M group and the industry but after a difficult first half, there are signs the company’s transformation efforts are beginning to take effect. Improved collections generated better full-price sales and lower markdowns towards the end of the year. This gave us confidence to accelerate our transformation plans in the fourth quarter with a particular focus on the upgrade of our logistics systems. Inevitably resulting in increased costs but will lead to a range of improvements for customers.” Karl-Johan Persson, CEO

Full-year (1 December 2017 – 30 November 2018)

  • The H&M group’s net sales, increased by 5 percent to SEK 210,400 m (200,004) in the financial year. In local currencies, net sales increased by 3 percent. The ongoing transition work contributed to gradually improved sales development and increased market share in most markets during the second half.
  • The group’s online sales continued to develop very well during the year. Online sales amounted to approximately SEK 30 billion, an increase of 22 percent, thereby making up for 14.5 percent (12.5) of the group’s total sales. In local currencies the increase was 21 percent.
  • Gross profit amounted to SEK 110,887 m (108,090). This corresponds to a gross margin of 52.7 percent (54.0).
  • Profit after financial items amounted to SEK 15,639 m (20,809).
  • Profit after tax amounted to SEK 12,652 m (16,184), corresponding to SEK 7.64 (9.78) per share.

Fourth quarter (1 September 2018 — 30 November 2018)

  • The group’s net sales increased by 12 percent to SEK 56,414 m (50,407) during the fourth quarter. In local currencies, net sales increased by 6 percent, driven by increased full-price sales and lower markdowns.
  • The group’s online sales increased by 24 percent in SEK and 20 percent in local currencies.
  • Gross profit amounted to SEK 30,592 m (27,929). This corresponds to a gross margin of 54.2 percent (55.4)
  • The cost of markdowns in relation to sales decreased by 0.6 percentage points.
  • Profit after financial items amounted to SEK 4,352 m (4,873). The group’s profit after tax amounted to SEK 3,543 m (3,993), corresponding to SEK 2.14 (2.41) per share.
  • Three new fulfilment centres with a total logistics area of around 230,000 square metres were opened during the quarter, providing increased capacity – particularly for online sales.
  • The result was negatively affected by costs generated in connection with the earlier replacement of logistics systems, but also by activities in preparation for upcoming transitions.Together with negative year-end effects these costs amounted to approximately SEK 560 m in the quarter. 
  • The board of directors proposes an unchanged dividend of SEK 9.75 (9.75) per share for the 2017/2018 financial year, to be paid out on two occasions in 2019. The board’s reasoning for the dividend proposal is that the underlying business is showing gradual improvements, investments (capex) will reduce in 2019 and the company remains in a strong financial position taking into consideration the capital structure target.
  • Net sales in the period 1 December 2018 to 28 January 2019 increased by 4 percent in local currencies compared to the corresponding period the previous year.
  • The platform was successfully replaced in Germany in January 2019. This means that all of H&M’s online markets are now on the new platform.
  • Stronger collections and increased full-price sales mean that for the first quarter 2019 the company expects markdowns to be around 1 percentage point lower and a continued improvement in the inventory situation compared with the previous quarter.
  • Online and physical stores are being increasingly integrated, while in parallel the rollout of H&M’s online store continues. Today H&M online is represented in 47 markets and during 2019 Mexico will be added as well as Egypt that will open via franchise.
  • In 2019 the H&M group plans a net addition of 175 new stores, of which almost half will consist of newer brands. 
Sign up for our ACROSS Newsletter. Subscribe to ACROSS Magazine.

Ticker MORE

Etele Plaza receives occupancy permit – tenants start moving in

The EUR 300 million Etele Plaza developed by Futureal has received the occupancy permit. Therefore, the tenants can now start setting up their stores in Buda’s largest shopping centre. The environment friendly complex with a rentable area of 55,000 sq m will bring the next generation of plaza design to Hungary this September.

Labtech appoints new Retail Asset Manager for Hawley Wharf Camden

LabTech has announced the appointment of Jonny Perkins as Retail Asset Manager for its new 580,000 sq ft development, Hawley Wharf Camden, and LabTech’s other Camden holdings.

Hines secures leasing of flagship retail store in Madrid

Hines has fully leased the retail space at its prime Calle Preciados 13 development in the heart of Madrid.

Sebastian Mueller to spearhead Kintyre’s new Advisory business

Kintyre, the Frankfurt and Berlin based investor and real estate platform, has announced the key appointment of Sebastian Mueller (44), to lead Kintyre’s newly founded Advisory business, and to join its senior management team.

Vienna-based Wowflow raises €300K to help facility management teams focus on real work

Wowflow, a mobile-first collaboration and workflow solution for facility maintenance teams, has raised a €300 thousand pre-seed investment to speed up growth in the German-speaking markets.

ACROSS Retail Talks online, on the topic “Outlook 2021”

The ACROSS Advisory Board has its say. On February 25, the ACROSS Retail Talk on "Outlook 2021" took place. 16 members of the ACROSS Advisory Board discussed the expectations and perspectives of the placemaking industry in an exciting year. A large, prominent expert audience followed the online event.