H&M Group post 8% sales growth in Q1 FY20

The H&M Group, a Swedish multinational clothing-retail company, posted 8 per cent increase in its net sales to SEK 54,948 million in first quarter (Q1) FY20 compared to sales of SEK 51,015 million in prior year. H&M group reported that second quarter will be very negatively impacted by the corona situation and will therefore be loss-making.

 

Gross profit for the year grew 10 per cent to SEK 28,034 million compared to SEK 25,526 million. Online sales jumped 48 per cent in Q1. Selling and administrative expenses in the quarter amounted to SEK 25,344 million (Q1 FY19: SEK 24,521 million). 

 

“The strong improvement in profit in the first quarter shows that customers appreciate our assortment and that our transformation work is having a good effect. The outbreak of coronavirus and the extraordinary public measures taken to reduce the spread of the virus have put people, communities and companies in an exceptional situation,” CEO of H&M, Helena Helmersson, said in a press release.

 

Sales in Asia and Oneania were SEK 8,119 million (Q1 FY19: SEK 8,351 million). Sales in Europe and Africa increased to SEK 35,928 million (Q1 FY19: SEK 33,162 million). North and South America sales were SEK 10,901 (Q1 FY19: SEK 9,502 million). 

 

The group reported that due to the rapid global spread of the Covid-19 virus, sales have decreased significantly. As at 31 March, a total of 3,778 out of 5,065 stores were closed. Net sales in March 2020 decreased by 46 per cent compared with March 2019. Since mid-March reportedly all of the H&M stores have been closed in several of the group’s largest markets.

 

However, online sales in March 2020 increased by 17 per cent. Group reported that digital sales channels remained open in 47 of the group’s 51 online markets.

 

“We are working very hard within the H&M group to manage the challenging situation caused by the coronavirus Covid-19 in the best possible way. The rapid course of events and the extraordinary public measures taken to reduce the spread of the virus have put people, communities and companies in an exceptional situation, Helmersson said.

 

I am convinced that as a company – having taken the right measures to get through this tough period – we will continue to stand strong. With customers all over the world, amazing employees and sound finances, we are very well positioned for this.”

Fibre2Fashion News Desk (JL)

The H&M Group, a Swedish multinational clothing-retail company, posted 8 per cent increase in its net sales to SEK 54,948 million in first quarter (Q1) FY20 compared to sales of SEK 51,015 million in prior year. H&M group reported that second quarter will be very negatively impacted by the corona situation and will therefore be loss-making.