• The H&M group's net sales in SEK increased by 8 percent in the first nine months of the

financial year to SEK 173,385 m (161,120). In local currencies, net sales were flat compared with
the previous year.

• The gross profit increased to SEK 87,239 m (82,266). This corresponds to a gross margin of 50.3 percent (51.1).
• Selling and administrative expenses amounted to SEK 78,016 m (75,918). In local currencies, these expenses decreased by 3 percent.
• Operating profit increased to SEK 10,205 m (6,348), corresponding to an operating margin of 5.9 percent (3.9). In 2022 one-time costs for Russia of SEK 1,751 m were charged against the nine-month result. Adjusted for these one-time costs the increase compared with the previous year was 26 percent.
• The result after tax increased by 61 percent to SEK 7,147 m (4,430), corresponding to SEK 4.39 (2.68) per share.
• Cash flow from operating activities increased to SEK 24,742 m (18,221).
• Financial net cash amounted to SEK 13,555 m (17,441). Cash and cash equivalents plus undrawn credit facilities were SEK 43,918 m (45,700).

• Net sales increased by 6 percent to SEK 60,897 m (57,450) in the third quarter. In local currencies, net sales were flattish compared with the previous year.
• Sales for Portfolio Brands in the third quarter increased by 16 percent in SEK and by 10 percent in local currencies.
• Gross profit increased by 10 percent to SEK 31,015 m (28,160). This corresponds to a gross margin of 50.9 percent (49.0).
• Selling and administrative expenses decreased by 4 percent to SEK 26,271 m (27,258).

• Operating profit increased to SEK 4,739 m (902). This corresponds to an operting margin of 7.8 percent (1.6). One-time costs of SEK 2,104 m for winding down the Russian operations were charged to the third quarter 2022. Adjusted for these one-time costs the increase compared with the previous year was 58 percent.
• The result after tax increased to SEK 3,319 m (531), corresponding to SEK 2.04 (0.32) per share.
• Currency adjusted the stock-in-trade decreased by 21 percent compared with the previous year. Converted into Swedish kronor the stock-in-trade decreased by 14 percent to SEK 40,358 m (47,141). The stock-in-trade in SEK represented 17.1 percent (21.6) of rolling 12-month sales.
• In the third quarter cash flow from operating activities improved by 118 percent to SEK 12,257 m (5,630).

• Sales during September 2023 are expected to decrease by 10 percent in local currencies compared with September 2022. The discontinued operations in Russia account for 4 percentage points of the decrease. The figure for September should be seen in the light of unusually hot weather in several of the company's European markets, which has had a substantial negative impact on sales during the month.
• Further to the authorisation given by the annual general meeting, the board of directors has decided to buy back the company's own B shares for SEK 3 billion starting from 27 September 2023.
• H&M is developing well in Latin America and plans to open its first store as well as online in Brazil

• H&M plans to gradually reopen most of its stores in Ukraine from November 2023 onwards.

 
Comments by Helena Helmersson, CEO
 
During the quarter the focus has been on profitability and inventory efficiency, resulting in strong cash flow and good profit development. We are taking further steps towards our goals and creating good conditions for profitable growth over time.

Sales in the third quarter started strongly with pent-up demand for summer garments following a cold May in most of our major markets. The effect then gradually decreased during the summer. There was a weaker end to the quarter, with comparative figures affected by the temporary reopening in Russia in August last year. Having now moved into September, we can see that the start of the autumn season has been delayed because the month so far has been marked by unusually hot weather in many of our European markets.

In times of high inflation where household living costs are rising significantly it is more important than ever to offer customers the best price and unbeatable value for money. Our highest priority remains the customer offering, where work to improve the assortment and the customer experience is making progress, alongside further integration of the two channels. We are continuing our investments in areas such as tech, AI and the supply chain, which is enabling improved flexibility, faster response times and greater precision in buying. This leads to customers having access to an even wider and more relevant assortment.

Our store portfolio has reached a level where we now see fewer closures going forward while at the same time new stores will be opened. The stores are an important part of building our brand and we are increasing investments in stores to further elevate the customer experience. We are also creating new conditions for growth. During September H&M was successfully launched on JD.com, one of China's biggest marketplaces for e-commerce. We are developing well in Latin America and are looking forward to taking H&M's offering to many new customers in Brazil, where the opening of the first stores as well as online is planned during 2025.

Since we temporarily closed our stores in Ukraine in February last year, we have maintained a close dialogue with various stakeholders. We now plan to gradually reopen most of our stores in the country from November 2023 onwards.

Our efforts to create conditions for profitable growth towards our long-term goals are taking us in the right direction. The cost and efficiency programme is proceeding at full speed and will continue to have an effect in the coming quarters. With a strong customer focus, improved cash flow and increased inventory efficiency our goal of an operating margin of 10 percent during 2024 remains.

Communication in conjunction with the nine-month report
 
The nine-month report, i.e., 1 December 2022 - 31 August 2023, will be published at 08:00 CEST on 27 September 2023, followed by a telephone conference at 09:00 CEST for the financial market and media. The telephone conference will be held in English, hosted by CEO Helena Helmersson, CFO Adam Karlsson and Head of IR Joseph Ahlberg.

For log in details for the telephone conference please register at hmgroup.com or via this link: https://app.webinar.net/rOKYX27mkWx

To book interviews in conjunction with the nine-month report on 27 September 2023, please contact: Anna Frosch Nordin, Head of Media Relations, telephone +46 73 432 93 14, anna.froschnordin@hm.com.

Contact
 

Joseph Ahlberg, Head of IR    +46 73 465 93 92
Helena Helmersson, CEO +46 8 796 55 00 (switchboard)
Adam Karlsson, CFO +46 8 796 55 00 (switchboard)

 
H & M Hennes & Mauritz AB (publ)
SE-106 38 Stockholm
Phone: +46-8-796 55 00, e-mail: info@hm.com
Registered office: Stockholm, Reg. No. 556042-7220

Information in this interim report is that which H & M Hennes & Mauritz AB (publ) is required to disclose under the EU Market Abuse Regulation (EU) No 596/2014. The information was submitted for publication by the abovementioned persons at 08:00 (CEST) on 27 Septermber 2023. This interim report and other information about the H&M group are available at hmgroup.com.

 
H & M Hennes & Mauritz AB (publ) was founded in Sweden in 1947 and is quoted on Nasdaq Stockholm. H&M's business idea is to offer fashion and quality at the best price in a sustainable way. In addition to H&M, the group includes the brands COS, Monki, Weekday, & Other Stories, H&M HOME, ARKET and Afound as well as Sellpy. For further information, visit hmgroup.com.