H&M remains positive towards future expansion

25 Jun '10

5 min read

The H&M Group announced Six month report of 2010.

The First Half-Year

• The H&M Group's sales excluding VAT during the first six months of the financial year amounted to SEK 51,879 m (49,837), an increase of 4 percent. In local currencies, the increase was 11 percent.
• Profit after financial items amounted to SEK 12,095 m (9,338), an increase of 30 percent. Group profit after tax was SEK 8,950 m (6,770), corresponding to SEK 5.41 (4.09) per share.

The Second Quarter

• The H&M Group's sales excluding VAT during the second quarter amounted to SEK 27,033 m (26,538), an increase of 2 percent. In local currencies, the increase was 10 percent.
• Gross profit amounted to SEK 17,808 m (16,201), corresponding to a gross margin of 65.9 percent (61.0).
• Profit after financial items amounted to SEK 7,040 m (5,784), an increase of 22 percent. Group profit after tax was SEK 5,209 m (4,193), corresponding to SEK 3.15 (2.53) per share.
• Sales in May increased by 6 percent in local currencies compared to the same month last year.
• Sales in the period 1 – 22 June 2010 increased by 22 percent in local currencies compared to the same period last year.
• Croatia and Romania new H&M countries in spring 2011.
• Morocco new franchise market in autumn 2011.

Sales
Sales including VAT for the first six months of the financial year amounted to SEK 60,699 m (58,352), an increase of 4 percent. In local currencies the increase was 11 percent and in comparable units sales increased by 1 percent. H&M Group sales excluding VAT amounted to SEK 51,879 m (49,837), an increase of 4 percent.

Sales including VAT for the second quarter amounted to SEK 31,604 m (31,070), an increase of 2 percent. In local currencies the increase was 10 percent. Sales in comparable units decreased by 1 percent. Sales excluding VAT for the second quarter amounted to SEK 27,033 m (26,538), an increase of 2 percent.

In May 2010, sales including VAT in local currencies, increased by 6 percent compared to the same month the previous year. Sales in comparable units decreased by 4 percent. Calendar effects are estimated to have had a negative impact of 3 to 4 percentage units in May.

The Group opened 86 (93) stores and closed 12 (9) stores during the first half-year. The total number of stores in the Group as per 31 May 2010 thus amounted to 2,062 (1,822), of which 42 are franchise stores, 27 COS stores and 59 stores within the FaBric Scandinavien Group.

Results for the first six months
Gross profit for the Group for the first six months amounted to SEK 33,198 m (29,379), an increase of 13 percent. This corresponds to a gross margin of 64.0 percent (59.0).

The operating profit amounted to SEK 11,943 m (9,035), an increase of 32 percent, which corresponds to an operating margin of 23.0 percent (18.1).

Operating profit for the six-month period has been charged with depreciation amounting to SEK 1,555 m (1,436).

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