H&M profits fall as costs and markdowns take toll

H&M attributed the fall to factors such as “more expensive US dollar and higher freight costs, but also by markdowns and investments in the customer offering”. 

H&M generated an operating profit of SEK7.12bn in the half to May 31, compared to SEK9.18bn in the comparable previous period. Net sales in local currencies net sales increased by 1%, and when converted, came to SEK112.05bn versus SEK113.27bn. 

H&M chief executive Daniel Ervér said: “Our plan, with its focus on the product offering, the shopping experience and brand, is again confirmed by the progress we see. The positive development in important areas such as online, H&M womenswear and H&M Move, as well as continued focus on good cost control, will contribute to a profitable sales development.

“In uncertain times with cautious consumers, we monitor macroeconomic and geopolitical developments closely and continuously adapt both the customer offering and the business to meet our customers’ needs in the best way. 

“We continue to strengthen the product offering and the experience both online and in our stores. With a clear plan, a strong financial position, good cost control and committed employees, we see good opportunities for long-term, sustainable and profitable growth.”