// H&M enjoys a surge in profits surge as its cost-cutting programme pays off
// The fashion retailer posted operating profit climbed 57% to £56.5m in the first quarter
H&M first quarter profits have surged despite consumers cutting spending as cost-cutting measures start to pay off.
The fashion retailer posted operating profit rocketed 57% to £56.5m in the three months to 28 February 2023, up from £35.5m.
Operating margins grew to 1.3%, up from 0.9%.
The group’s net sales grew 12% to £4.8bn for the quarter boosted by a 19% jump in sales of its portfolio brands.
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The retail giant is in the midst of a cost-cutting programme which it implemented after profits tumbled last year as it sought to retain its price-sensitive customers and struggled with freight and energy costs.
Chief executive Helena Helmersson said: “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% already next year.
”Portfolio brands – COS, Monki, Weekday, & Other Stories and Arket – have developed strongly and are making an increasingly important contribution to the group’s growth.
“COS has carried out an extensive upgrade of its assortment and strengthened its positioning in the premium segment. Arket continues to grow at a fast pace and has tripled its sales since 2019.”
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