// Net sales at H&M Group surge by 20%
// The group’s profit after tax rose by 33% to £390m in the second quarter,
Swedish fashion giant H&M Group has said net sales increased by 20% to £8.4bn in the six months to 31 May, as a result of an increase in full-price sales and lower costs for markdowns.
Gross profit at the owner of H&M, Monki, & Other Stories, Arket, and Weekday rose to £4.36bn during the period, corresponding to a gross margin of 52.2%.
Operating profit during the six months rose to £400m corresponding to an operating margin of 5.3%.
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H&M Group also reported better-than-expected sales in the three months to 31 May with a 12% rise.
The group’s profit after tax increased by 33% to £390m in the second quarter, on the back of a 17% rise in sales to £4.47bn, excluding Russia, Belarus and Ukraine sales.
H&M Group chief executive Helena Helmersson said: “Well-received collections have led to strong development, with a further increase in full-price sales and decrease in markdowns. Sales in physical stores increased substantially while online continues to do well. This once again shows the value of having both physical and digital channels which strengthen and complement each other. The integration of the sales channels is therefore ongoing, in parallel with continual initiatives – in particular within tech, the supply chain and sustainability.
Despite the strong results, Helmersson warned of many challenges ahead associated with inflation and supply chain disruption.
“Although most of the restrictions associated with the Covid-19 pandemic essentially seem to be over, many challenges remain. Disruption and delays still exist in the supply chain, but are gradually being eased. At the same time, there is substantial inflation. The situation associated with the war in Ukraine and its consequences for our business are continually being evaluated. We are actively looking at various options to find solutions that give consideration to customers and colleagues as well as the impact on the business as a whole.
“To navigate in a rapidly changing world it is more important than ever to be flexible and able to take quick decisions. As a direct consequence of the challenges in the world around us we are carrying out extensive work to prioritise initiatives, redistribute resources and ensure continued good profitability. We have a well-positioned customer offering and are fully focused on meeting customers’ ever-increasing expectations. Despite the significant inflation in the world, customers must always feel confident that with all the H&M group’s brands they will find the best combination of fashion, price, quality and sustainability. With a strong customer focus, committed colleagues and a robust financial position we see good opportunities for profitable, long-term and sustainable growth.”
The business also announced that it would acquire £240m worth of its own shares, returning cash to the shareholders.