H&M Group reports rise in net sales for H1 2022

H&M Group has revealed its financial results for the first half of the year, ending 31 May 2022. Net sales at the company increased by 20% to £8.4 billion (SEK 103.7 billion) as a result of collections being well-received, an increase in full-price sales and decrease in markdowns.

Gross profit at the retailer, which owns H&M, Cos, Arket, Monki, & Other Stories and Weekday, rose to £4.36 billion (SEK 54 billion), during the period, corresponding to a gross margin of 52.2%.

Operating profit increased to £400 million (SEK 5.4 billon), for an operating margin of 5.3%, up from 3.1% from the same period in 2021. Profit after tax also increased to £310 million (SEK 3.89 billion), up from SEK 1.69 billion.

H&M Group also confirmed that second quarter net sales rose by 17% to £4.4 billion, with a 12% rise in local currencies. Excluding Russia, Belarus and Ukraine, sales increased by 17% in local currencies. The well-received collections led to costs for markdowns decreasing "by around 1% in relation to sales".

Sales in the month of June is expected to decrease by 6% in local currencies compared with June 2021. The paused sales in Russia, Belarus and Ukraine represent 5% of the decrease. According to the group, the June figure "should be seen in the light of a very strong comparison base in June 2021", an increase by 24%, while July and August increased by 6%.

Helena Helmersson, H&M Group CEO, commented: “Well-received collections have led to strong development, with a further increase in full-price sales and decrease in markdowns. Sales in physical stores increased substantially while online continues to do well. This once again shows the value of having both physical and digital channels which strengthen and complement each other. The integration of the sales channels is therefore ongoing, in parallel with continual initiatives – in particular within tech, the supply chain and sustainability.

“Although most of the restrictions associated with the COVID-19 pandemic essentially seem to be over, many challenges remain. Disruption and delays still exist in the supply chain, but are gradually being eased. At the same time, there is substantial inflation. The situation associated with the war in Ukraine and its consequences for our business are continually being evaluated.

“We are actively looking at various options to find solutions that give consideration to customers and colleagues as well as the impact on the business as a whole. To navigate in a rapidly changing world it is more important than ever to be flexible and able to take quick decisions. As a direct consequence of the challenges in the world around us we are carrying out extensive work to prioritise initiatives, redistribute resources and ensure continued good profitability. We have a well-positioned customer offering and are fully focused on meeting customers’ ever-increasing expectations.

“Despite the significant inflation in the world, customers must always feel confident that with all the H&M group’s brands they will find the best combination of fashion, price, quality and sustainability. With a strong customer focus, committed colleagues and a robust financial position we see good opportunities for profitable, long-term and sustainable growth.”