However, despite the positive sales growth, the gross margin in Q1 FY23 decreased to 47.2 per cent YoY from 49.3 per cent in Q1 FY22 due to negative external factors affecting purchases made during the quarter. The operating profit amounted to SEK 725 million, a significant improvement from the SEK 458 million recorded in the first quarter of 2022, representing an operating margin of 1.3 per cent, H&M said in a press release.
Swedish fashion retailer H&M has reported a 12 per cent YoY growth in Q1 FY23 net sales to SEK 54,872 million.
The operating profit amounted to SEK 725 million, up from SEK 458 million YoY, while the gross margin decreased to 47.2 per cent from 49.3 per cent.
The company expects a 4 per cent sales increase in local currencies for the period March 1-31, 2023.
The company’s result after tax was SEK 540 million, compared to SEK 217 million in the same period last year, equivalent to SEK 0.33 per share, up from SEK 0.13 per share previously.
In Q1 FY23, the sales for the company’s portfolio brands increased by 19 per cent YoY in SEK and 11 per cent YoY in local currencies. The company’s stock-in-trade decreased by 16 per cent compared to the previous year. Additionally, the company consolidated Sellpy, one of Europe’s largest second-hand platforms, into the H&M Group from the first quarter.
In a recent report by environmental and climate organisation Stand.earth, the H&M Group was ranked highest for its climate actions out of a total of 43 fashion brands.
Looking ahead, H&M Group expects sales in local currencies to increase by 4 per cent in the period from March 1-31, 2023, compared to the same period last year. However, the start of the spring season has been delayed in many important markets due to cold weather, the release added.
“The H&M group continues to stand strong with a robust financial position, stable cash flow and a well-balanced inventory. The start of the year shows that we have taken further steps towards the goal of achieving an operating margin of 10 per cent already next year,” said Helena Helmersson, CEO.
Fibre2Fashion News Desk (DP)