The group had one-off positive tax income of SEK 399 million as a result of the US tax reform (Tax Cuts & Jobs Act). Profit after financial items amounted to SEK 1,263 million (3,212). The group’s profit after tax amounted to SEK 1,372 million (2,457), corresponding to SEK 0.83 (1.48) per share. Profit development in the quarter was negatively affected by weak sales development as well as higher markdowns.

H&M’s online store in India, which was launched in mid-March, has got off to a very good start. The launch of H&M and H&M Home on Tmall in China on March 21 exceeded expectations.

"The rapid transformation of the fashion retail sector continues. As communicated previously, the start of the year has been tough. 2018 is a transitional year for the H&M group, as we accelerate our transformation so that we can take advantage of the opportunities generated by rapid digitalisation. Weak sales in the fourth quarter, partly caused by imbalances in the assortment for the H&M brand, resulted in the need for substantial clearance sales in the first quarter. The high level of clearance sales combined with unusually cold winter weather had a negative impact on the sales of the spring garments. In the first quarter the H&M group’s sales were unchanged in local currencies," Karl-Johan Persson, CEO.

"Many of our ongoing initiatives are giving good indications and results, even though they have not yet been implemented at a large enough scale to have a decisive effect on the overall results. The weak sales development combined with substantial markdowns had a significant negative impact on results in the first quarter," added Persson.

In 2018, Uruguay and Ukraine will become new H&M markets in the second half of the year. The global roll-out of online continues. With the launch of H&M online via franchise in Saudi Arabia and the United Arab Emirates in spring/summer 2018, H&M will offer online shopping in 47 markets. Afound will be launched as a new brand during 2018. Afound will be an off-price marketplace offering products from well-known and popular fashion and lifestyle brands, both external brands and those from the H&M group. Its first stores and a digital marketplace will open in Sweden to start with.

"Our assessment remains that sales for online and New Business will grow by more than 25 percent during the year, and that the H&M group will achieve a somewhat better result for full-year 2018 compared with the previous year. We take a long-term view that together with our knowledge and experience enable us to navigate through times such as this. We look forward to telling you more about the H&M group’s continued transformation work, which will lead us back to healthy growth in both sales and profitability," concluded Persson. (RR)

Fibre2Fashion News Desk – India