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More pressure on Swedish fashion company, H&M as sales continues to struggle

Thursday, 21 March 2013
Fashion chain, H&M Group’s sales including for the first quarter of 2013 including VAT increased in local currencies by 6 percent during the first quarter. Sales in the quarter have been negatively affected by calendar effects by slightly more than 2 percentage points.

According to a press release from the company detailing the sales development, converted into Swedish Krona (SEK,) sales excluding VAT amounted to Skr 28,392 million against Skr27,832million same period last year, an increase of 2 percent. The difference in sales performance in local currencies versus SEK is explained by substantial negative currency translation effects as a result of the continued strengthening of the Swedish krona against most sales countries’ currencies.

Gross profit amounted to Skr 15,679 million against Skr15,537million, corresponding to a gross margin of 55.2 percent (55.8). Increased markdowns have negatively affected the gross margin by 0.5 percentage points in relation to sales compared to the corresponding quarter last year.

Profit after financial items amounted to Skr 3,234 million against Skr3,701million same period last year. The Group’s profit after tax amounted to Skr 2,458 million Skr2,739 million similar period last year. Analyst’s expectation show that the profit was in line with expectations though there is growing pressure on profit.

The company’s board proposes Skr1.49 per share, a fall compared to last year’s Skr1.65 per share. Profits have been negatively affected by large long-term investments but also by substantial negative currency translation effects.
H&M first quarter runs between 1 December 2012 – 28 February 2013
By scancomark.com Team

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