// H&M profits increase as the retailer bounces back from effects of Covid-19
// Gross profit grew 12.3% to £8.34bn in the full year
H&M has heralded a “strong recovery” as full-year profits increased nearly sevenfold in the year to November 30, 2021, to SEK 2 billion (£163.1 million).
The fashion retailer recorded a profit after financial items of SEK 14.3 billion (£1.14 billion) during the period while gross profit grew 12.3% to SEK 105 billion (£8.34 billion). Sales across the group rose 6% in constant currencies to SEK 198.97 billion (£15.8 billion).
H&M chief executive Helena Helmersson set out ambitious plans to double group sales by 2030 while halving its carbon emissions, when unveiling the profits rise.
It will open stores in six new markets in 2022 – Kosovo, North Macedonia, Ecuador, Costa Rica, Guatemala and Cambodia – and launch an online proposition in Belarus, Kazakhstan, Ukraine, Colombia and Peru.
Helmersson said the group “can fully focus on growth again” after the trading landscape returned to “a more normalised situation” following the Covid-19 crisis.
“By quickly taking decisive action we have succeeded in managing the negative effects of the pandemic,” she said.
“We ended the year strongly with sales back at the same level as before the pandemic and with profitability better than it has been for several years.
“We see significant opportunities to grow both sustainably and profitably. The goal for 2030 is to double sales while at the same time halving our carbon footprint.”
Sales across the group rose 6% in constant currencies to SEK 198.97 billion (£15.8 billion) during the financial year.
Gross margin climbed 2.8 percentage points to 52.8%, aided by growth in full-price sales and digital sales rose 24% year on year in constant currencies, accounting for 32% of total sales.
In its fourth quarter, H&M posted an 8% uplift in net sales to SEK 56.8 billion (£4.5 billion), as sales growth in its UK business outpaced its other major markets. UK revenues surged 36% in constant currencies to SEK 4.3 billion (£430.5 million) over the quarter.
Helmersson said: “While we respect the ongoing challenges brought by the pandemic, we have demonstrated our ability to quickly adapt and seize opportunities that arise.
“Customer focus, quick action and flexibility have been key in managing the pandemic and will be just as important going forward.
“Customers must always feel confident that with us they will be able to find the best combination of fashion, price, quality and sustainability.
“With continued satisfied customers and strong relations with all our partners, we are optimistic about the opportunities for long-term and sustainable growth for the H&M Group.”