However, despite positive sales growth, gross margin declined to 49.3 percent from 47.2 percent YoY in Q1 FY23 due to negative external factors impacting purchases made during the quarter. Operating profit amounted to SEK 725 million, a significant improvement from the SEK 458 million recorded in the first quarter of 2022, representing an operating margin of 1.3 percent, H&M said in a press release.
Swedish fashion retailer H&M reported net sales of SEK 54,872 million in FY23 Q1, up 12 percent YoY. Operating profit amounted to SEK 725 million, from SEK 458 million YoY, while gross margin decreased from 49.3 percent to 47.2 percent. The company expects sales growth of 4 percent in local currency for the period March 1-31, 2023.
The company’s result after tax was SEK 540 million, compared to SEK 217 million in the same period last year, equivalent to SEK 0.33 per share, compared to SEK 0.13 per share previously.
In Q1 FY23, sales of the company’s portfolio brands grew 19 percent YoY in SEK and 11 percent YoY in local currency. The company’s stock-in-trade fell 16 percent from the previous year. Additionally, the company integrated Sellpy, one of Europe’s largest second-hand platforms, into the H&M Group from the first quarter.
In a recent report by environmental and climate organization Stand.earth, the H&M Group was ranked highest for climate action out of a total of 43 fashion brands.
Looking ahead, H&M Group expects sales to grow by 4 percent in local currency between March 1-31, 2023, compared to the same period last year. However, due to winter, the start of spring season has been delayed in many important markets, the notification said.
“The H&M Group continues to be strong with a strong financial position, stable cash flow and a well-balanced inventory. The beginning of the year shows that we have already taken further steps to achieve an operating margin of 10 percent next year,” said Helena Helmerson, CEO.
Fibre2Fashion News Desk (DP)