Thanks to strong growth in the fourth quarter, the Swedish clothing group Hennes & Mauritz AB (H&M) unexpectedly increased its profit significantly in the 2020/21 financial year. This emerges from the latest results presented by the company on Friday. At the same time, the parent company of brands such as H&M, Cos, Monki, Weekday, & Other Stories and Arket announced ambitious growth targets: the aim is to double sales by 2030 at the latest, explained Hennes & Mauritz.
In the past financial year, which ended on November 30, the group’s turnover amounted to 199.0 billion Swedish crowns (18.9 billion euros). It thus exceeded the previous year’s level by six percent. In the respective local currencies, sales increased by twelve percent. Online business grew at an above-average rate of 24 percent (currency-adjusted +30 percent).
Thanks to lower price discounts and savings in operating costs, the group increased its profit significantly: The operating result jumped from 3.10 billion Swedish crowns in the previous year to 15.3 billion Swedish crowns now. Net profit grew from 1.24 to 11.0 billion Swedish crowns (1.05 billion euros).
In the fourth quarter, the surplus grows by 86 percent
In the fourth quarter, Hennes & Mauritz once again exceeded profit expectations. Despite a slight decline in Germany, the largest single market, where sales of 8.6 billion Swedish crowns were one percent below the previous year’s level (currency-adjusted +3 percent), group sales increased by eight percent (currency-adjusted 11 percent) to 56.8 billion Swedish crowns crowns too.
Net income rose 86 percent year-on-year to SEK 4.62 billion. The group justified the surprisingly strong growth with “the positive response to the collections, higher full-price sales, lower price reductions and good cost control”.
Hennes & Mauritz announces expansion into new markets
Hennes & Mauritz started the new financial year with a significant increase in sales: In the months of December and January, currency-adjusted sales were twenty percent higher than in the same period of the previous year, the clothing retailer explained, but also pointed out that the effects of the Covid 19 pandemic a year ago had weighed heavily on business in many of the company’s key markets.
The company also announced that it intends to continue its expansion course in the current year: the first stores are to be opened in a total of six new markets. The Swedes have their own stores in Ecuador, North Macedonia and Kosovo, and work with franchise partners in Costa Rica, Guatemala and Cambodia. The online business is to be expanded to Belarus, Kazakhstan, Peru and the Ukraine.