H&M Group shows strong recovery, wants to double sales by 2030
The H&M Group has released its financial results for the full financial from 1 December 2020 to 30 November 2021, showing its net sales increased by 6% to £15.8bn (SEK 198,967 million), while its CEO has outlined plans to double sales by 2030.
Gross profit increased to £8.3bn (SEK 105,006m) during the period with a gross margin of 52.8%.
“We ended the year strongly, with sales back at the same level as before the pandemic and with profitability better than it has been for several years. Now that we are back to a more normalised situation with a strong financial position and good profitability, we can fully focus on growth again,” said Helena Helmersson, CEO of the H&M Group.
In the fourth quarter, lasting 1 September 2021 to 30 November 2021, the group's net sales increased by 8% to £45.4bn (SEK 56,813 million), and in local currencies it increased by 11%. This corresponded to a gross margin of 55.2%.
Profit after financial items increased by 64% to £4.7bn (SEK 6,003 million). Before the allocation to its home income plan (HIP), profit for the quarter increased by 70%. The Group said these strong results in the fourth quarter were mainly a result of well-received collections with more full-price sales, lower markdowns and good cost control.
Helmersson also highlighted the group's concentrated efforts to double its sales, with 2021 as a baseline, while halving its carbon footprint, by 2030. The latter goal is linked to the H&M group's COP26 commitment, with the aim to reduce carbon footprint in absolute figures by 56% by 2030 taking 2019 as a baseline.
Another goal is to exceed 10% profitability, no later than 2024, while the group’s ambition to increase sales by 10–15% per year with continued high profitability remains a long-term target.
To achieve its growth goals, the H&M Group will double the level of investment in 2022, focusing both on its growth areas as well as infrastructure such as tech and the supply chain, renewable energy and sustainable materials.
H&M will also launch in six new markets this year, with stores opening in Ecuador, Kosovo and North Macedonia, and via franchise in Costa Rica, Guatemala and Cambodia. Online shops will open in Belarus, Colombia, Kazakhstan, Peru and Ukraine.
For the H&M brand specifically the Group is looking to strengthen product offering, and step up the pace of investment in its physical and digital stores to improve customer experience. It also highlighted its success with its investment arm Co:lab. In a short time its investment in 20 new companies proved to be of significant value both financially and in the existing operations, including for customer experience and innovative materials.
Helmersson added: "In an industry in rapid transition exciting opportunities arise, and we are constantly evaluating investments and acquisitions that could contribute to the H&M group’s continued sustainable growth.
"While we respect the ongoing challenges brought by the pandemic, we have demonstrated our ability to quickly adapt and seize opportunities that arise. Customer focus, quick action and flexibility have been key in managing the pandemic and will be just as important going forward.
"Customers must always feel confident that with us they will be able to find the best combination of fashion, price, quality and sustainability. With continued satisfied customers and strong relations with all our partners, we are optimistic about the opportunities for long-term and sustainable growth for the H&M group."