H&M's sales rise despite COVID-19 challenges
H&M Group has released its financial results for the three months ending 28 February 2022, revealing an increase in sales despite challenges from the pandemic and supply chain issues across its major markets.
For the first quarter of 2022, H&M Group shared the following results:
- Net sales increased 18% in Q1. The group’s net sales increased 23% to £3.9 billion,
- Gross profit rose to £1.9 billion, corresponding to a gross margin of 49.3%.
- Operating profit increased to £37.6 million, compared to a loss of £91.8 million the previous year.
- The group’s profit after tax increased to £17.8 million.
H&M Group credits its success to "well-received collections", which led to a higher share of full price sales and lower costs for markdowns.
Overall, sales and profits for the quarter were impacted by the negative effects of the pandemic in many of the group’s major markets. The group was also affected by increased growth-related initiatives, particularly within tech and the supply chain.
H&M group has paused all sales in Russia, Belarus and Ukraine. Net sales in the period 1-28 March 2022 increased by 6% compared to the same period last year. Excluding Russia, Belarus and Ukraine the increase was 11%.
Helena Helmersson, CEO of H&M Group, said: “Having ended last year with sales back at the same level as before the pandemic and in a strong financial position, we started the new year with increased initiatives to create an even better foundation for long-term growth. The initiatives mainly involve continuing to develop the customer experience by, for example, further broadening the assortment and integrating the sales channels, and by continuing to invest in infrastructure such as tech and the supply chain, but also in renewable energy and sustainable materials.
"In addition to the general consequences of the pandemic such as disruptions and delays in the supply chain, some of our major markets were impacted by a new wave of the pandemic in the first quarter. Despite this we saw a recovery of sales in physical stores compared with last year, while online sales continued to perform well. This shows the value of having both physical and digital channels which strengthen and complement each other. Well-received collections led to full-price sales continuing to increase which led to more than expected decrease of markdowns."