In the reported period, net sales increased 12 per cent to SEK 56,414 million during the fourth quarter. In local currencies, net sales rose 6 per cent, driven by improved full-price sales and lower markdowns.
H&M was able to outperform a number of markets in the fourth quarter. In the UK, it witnessed 38 per cent online growth, offset against a 1 per cent decline in stores, led to total growth of 8 per cent. In several markets, the total growth was driven by both physical stores and online. Among these were China (+24 per cent), India (+43 per cent) and Russia (+27 per cent). However, other markets such as the US and Norway, were more challenging. In parallel with the global online roll-out, it is intensifying itsstore portfolio optimisation and continues the integration of physical stores and digital channels.
"It has been a challenging year for H&M group and the industry but after a difficult first half, there are signs the company’s transformation efforts are beginning to take effect. Improved collections generated better full-price sales and lower markdowns towards the end of the year. This gave us confidence to accelerate our transformation plans in the fourth quarter with a particular focus on the upgrade of our logistics systems. Inevitably resulting in increased costs but will lead to a range of improvements for customers," Karl-Johan Persson, CEO.
Stronger collections and increased full-price sales mean that for the first quarter 2019 the company expects markdowns to be around 1 percentage point lower and a continued improvement in the inventory situation compared with the previous quarter. In 2019 the H&M group plans a net addition of 175 new stores, of which almost half will consist of newer brands.
"Changing consumer behaviour and technological innovation will continue to transform how and when people shop. We are building a business with the flexibility to respond to this constant evolution. We have further to go, and there will continue to be challenges ahead, but the progress we have made across our transformation priorities reinforces the strength of our strategy and gives us confidence to move ahead at full speed," concluded Persson. (RR)
Fibre2Fashion News Desk – India
| On 23rd Sep 2021
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