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H&M's revenue and profit increase, aims to double sales by 2030

By Prachi Singh

28 Jan 2022

Business

Image: H&M media centre
Full-year net sales at H & M Hennes & Mauritz AB, in local currencies increased by 11 percent in the fourth quarter 2021 compared with the corresponding period last year. Converted into SEK net sales increased by 8 percent in the quarter to 56,813 million Swedish krona.

For the financial year 2021 the H&M group’s net sales in local currencies increased by 12 percent. Converted into SEK net sales increased by 6 percent to 198,967 million Swedish krona.

Gross profit increased to 105,006 million Swedish krona corresponding to a gross margin of 52.8 percent. Profit after financial items increased to 14,300 million Swedish krona and the group’s profit after tax increased to 11,010 million Swedish krona, corresponding to 6.65 Swedish krona per share.

“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. Now that we are back to a more normalised situation with a strong financial position and good profitability, we can fully focus on growth again,” said Helena Helmersson, CEO of the H&M Group.

Highlights of H&M Q4 and full year financial results

In the fourth quarter, H&M’s online sales increased by 10 percent in local currencies and by 6 percent in SEK, while in the financial year online sales increased by 30 percent in local currencies and by 24 percent in SEK, and represented 32 percent of the group’s total sales. Profit after financial items increased by 64 percent to 6,003 million Swedish krona and before the allocation to HIP, profit for the quarter increased by 70 percent. The group’s profit after tax increased to 4,621 million Swedsih krona, corresponding to 2:79 Swedish krona per share.

Sales for portfolio brands in the fourth quarter increased by 20 percent in local currencies and by 18 percent in SEK. For the financial year the increase was 15 percent in local currencies and 11 percent in SEK.

By 2030, the H&M group aims to double sales while at the same time halving its carbon footprint. Profitability is expected to exceed 10 percent over time.

The board of directors proposes an ordinary dividend of 6.50 Swedish krona per share to be paid in two instalments, and authorisation for a 3 billion Swedish krona share buyback programme.

For the period between December 1, 2021 to January 31, 2022 sales in local currencies are expected to increase by 20 percent compared with the same period last year. The period was negatively affected by the latest wave of the pandemic and its consequences in many of the group’s larger markets.

H&M to continue online and offline retail expansion

In 2022 H&M will launch in six new markets: the first stores will open in Ecuador, Kosovo and North Macedonia, and via franchise in Costa Rica, Guatemala and Cambodia. The rollout of H&M online will continue in 2022 with Belarus; Colombia, Kazakhstan, Peru and Ukraine.

In the 2021 financial year the H&M group opened 104 new stores and closed 321 stores, resulting in a net decrease for the year of 217 stores. For 2022 the plan is to open around 120 new stores and close around 240 stores, making a net decrease of around 120 stores.

In September the first H&M store in Panama opened via franchise and Monki was launched on the e-commerce platform Zalora in the Philippines. In the fourth quarter H&M was also launched online in Chile, and & Other Stories was launched with its first store in Israel via franchise, on The Yes and on Nordstrom online in the US. In addition, Weekday was launched on Thread in the UK and Arket at The Hyundai in Korea. In December 2021 Arket opened its first store in Russia, & Other Stories launched on Yoox.com and COS launched online in Saudi Arabia via franchise.

In 2022, & Other Stories will launch in Singapore and Arket will open its first store in France in the second half. COS will launch online in Australia, and via Zalora in the Philippines. Monki will be launched on About You, and on Zalora in Singapore and Malaysia.

As at November 30, 2021 the H&M group had 4,801 stores.