H&M reached new record profit

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H&M has made another record year. Total sales went up 11 percent in local currencies, and the profit of nearly 21 billion SEK is the best so far.

”Sales have developed well for all our brands: H&M, H&M Home, COS, & Other Stories, Weekday, Monki and Cheap Monday,” comments CEO Karl-Johan Persson.

The H&M group’s sales in the fourth quarter (1 September 2015 – 30 Nov 2015) in SEK excluding VAT increased by 14 percent. In local currencies the increase was 9 percent.

Gross profit amounted to SEK 27,997 MSEK (25,744), an increase of 9 percent. This corresponds to a gross margin of 57.5 percent (60.4). Profits in the quarter were negatively affected by substantially higher purchasing costs due to the strengthened US dollar.

H&M reports it’s first stores in India, New Delhi and in South Africa, Cape Town, were very well received.

“2015 has been a very expansive year for the H&M group. We have opened 413 new stores net, of which 249 in the fourth quarter, as well as ten new H&M online markets. In total, we now have stores in 61 markets and offer online sales in 23 of these.” comments Karl-Johan Persson, CEO

During the year sales totalled 210 billion SEK including VAT, which is an increase of 19 percent in SEK. In local currencies the increase was 11 percent. Profit for the year after tax increased to 20.9 billion SEK, which is H&M:s highest result to date – this despite the fact that the strong US dollar exchange rate has made the purchasing much more expensive. Gross profit increased by 16 percent to 103,167 MSEK (89,052).

The increase in the financial result for the year means that 75 MSEK has been allocated to the H&M Incentive Program (HIP), which is for all employees in the H&M group. The accumulated value to an employee who has been in the programme since it started five years ago amounts to approximately 45,000 SEK per person.

”Our growth target of increasing the number of stores by 10-15 percent per year with continued high profitability remains intact. In 2016 the fashion group plan to open 425 new stores net and open H&M stores in three new markets: New Zealand, Cyprus and Puerto Rico. In addition, H&M plans to offer e-commerce in a further nine existing H&M markets. These countries are Ireland, Japan, Greece, Croatia, Slovenia, Estonia, Latvia, Lithuania and Luxembourg.

”We are very pleased with the continued strengthening of our online customer offering and developments within our online operations.”

H&M, is according to the Global 100 index, the most sustainable fashion chain in the world.

”We have made lots of improvements and are constantly working on how to improve even further to meet the challenges that we and our industry are facing. A specific example of what we have achieved in 2015 is that we have switched to 100 percent renewable energy in all markets where this is possible. For the group as a whole, this means that around 80 percent of all the energy that we use globally comes from renewable sources; in 2014 this figure was 27 percent. We have also increased the proportion of cotton that comes from sustainable sources, which now represents 31 percent of our total cotton usage (21 percent in 2014). Our goal is that all cotton in our product range will come from sustainable sources by 2020 at the latest.” comments Karl-Johan Persson.