Hennes & Mauritz stands strong in challenging market
Hennes & Mauritz AB (H&M) releases its full-year report from 1 December 2010 to 30 November 2011.
The H&M Group's sales including VAT increased in local currencies by 8 percent during the financial year. Sales in comparable units decreased by 1 percent. Sales in SEK were strongly negatively affected by currency translation effects. Converted into SEK, sales excluding VAT amounted to SEK 109,999 m (108,483).
Gross profit amounted to SEK 66,147 m (68,269), corresponding to a gross margin of 60.1 percent (62.9).
Profit after financial items amounted to SEK 20,942 m (25,008). Of this year's profit decrease compared to the previous year, approximately SEK 1.5 billion in total is due to negative currency translation effects and the item affecting comparability relating to the H&M Incentive Program.
Group profit after tax was SEK 15,821 m (18,681), corresponding to SEK 9.56 (11.29) per share.
Strong expansion during the year. The Group opened 266 (218) new stores net. China, the US, the UK and Germany were the largest expansion markets.
The H&M Group's sales including VAT increased by 6 percent in local currencies in the fourth quarter. Sales in comparable units decreased by 3 percent. Converted into SEK, sales excluding VAT amounted to SEK 30,952 m (29,711).
Gross profit amounted to SEK 19,150 m (18,792), corresponding to a gross margin of 61.9 percent (63.2).
Profit after financial items amounted to SEK 6,802 m (7,178). Group profit after tax amounted to SEK 5,357 m (5,487), corresponding to SEK 3.24 (3.32) per share.
The Board of Directors proposes a dividend of SEK 9.50 (9.50) per share for the financial year 2010/2011. Sales in December 2011 increased by 13 percent in local currencies compared to the same month the previous year. Sales in comparable units increased by 4 percent. Sales in the period 1–24 January 2012 increased by 12 percent in local currencies compared to the same period last year. H&M plans a net addition of around 275 stores for the financial year 2011/2012. Bulgaria, Latvia, Malaysia and Thailand will become new H&M markets in 2012. In addition to these countries, H&M plans to expand into Mexico in autumn 2012.
The first COS stores in Hong Kong, Italy, Finland and Kuwait are planned to open in 2012.
Comments on the full-year by Karl-Johan Persson, CEO
“H&M stands strong in a challenging market. We increased sales by 8 percent in local currencies and continued to gain market share during what was one of the toughest years for a long time for the fashion retail industry in many countries. The fact that we have gained market share, proves that our customers appreciate our collections, which offer a wide range of inspiring fashion for everyone.
The situation in the sourcing markets has also been challenging. Cost inflation has been high resulting in increased purchasing costs for the fashion retail industry. Despite increased purchasing costs, we chose a strategy of strengthening our customer offering and market position even further relative to competitors. The investments have varied over time and have involved everything from even better prices to even higher quality and more sustainable materials. We are convinced that this will gradually become more evident to customers and will strengthen H&M's already strong market position even further.