Swedish clothing brand H&M Group has disclosed a modest decline in net sales for the fourth quarter (Q4) of the fiscal year 2024 (FY24), reporting a drop to Skr62.19bn ($5.64bn) from Skr62.65bn in the same quarter of the previous year.
The company attributed this downturn to a shift in consumer purchasing patterns, particularly as Black Friday 2024 occurred later than in 2023 leading to an increased volume of November orders being recorded as December sales.
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Despite the sales dip, H&M’s gross profit for Q4 FY24 rose to Skr33.94bn from Skr33.65bn, resulting in a gross margin of 54.6%.
The company’s operating profit also demonstrated positive movement, climbing to Skr4.62bn from Skr4.33bn, which corresponds to an operating margin increase from 6.9% to 7.4%.
The after-tax result increased almost twofold to Skr3.081bn, equivalent to Skr1.92 per share.
H&M’s selling and administrative expenses remained relatively stable at Skr29.30bn in Q4 FY24, slightly down from Skr29.31bn reported in the same quarter of the previous year.
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By GlobalDataThese expenses included long-term marketing investments of approximately Skr600m and costs of Skr200m related to the planned closure of Monki stores in 2025.
Inventory levels experienced an uptick, reaching Skr40.34bn compared to Skr37.35bn in the previous year. This increase was significantly influenced by extended transport durations due to logistical challenges in the Red Sea region and the altered timing of Black Friday.
For the entire fiscal year 2024, H&M reported net sales of Skr234.47bn, reflecting a 0.6% decline from Skr236.03bn in the preceding year.
The company’s online transactions represented 30% of total sales during the year.
Its gross profit for the fiscal year increased by 4% to Skr125.29bn, with an improvement in gross margin noted at 53.4%.
The brand registered an operating profit of Skr17.30bn, increasing by 28% compared with the year before, excluding the result from investments in associated companies and joint ventures.
This significant growth facilitated an allocation of Skr236m towards the H&M Incentive Program (HIP), designed to benefit all employees.
In Q4, the company opened its first store in the Dominican Republic through a franchise model while simultaneously enhancing its digital presence on major e-commerce platforms across China, India, Türkiye and Saudi Arabia.
In 2025, H&M plans to open 80 new stores, primarily in emerging markets, while closing 190 predominantly in established markets. This includes several Monki locations.
H&M CEO Daniel Ervér said: “We are proud of the progress we have made to further strengthen our products, shopping experience, and brand building. While there is a lot left to do, we have a strong plan to drive the long-term growth we are aiming for.”
In December 2024, H&M Group acquired a minority stake in Swedish retail technology platform Voyado for an undisclosed sum, as part of a new strategic alliance between the companies.
