• The H&M group's net sales increased by 3 percent in the second quarter to SEK 59,605 m (57,616). In local currencies net sales increased by 3 percent.
• Gross profit increased by 11 percent to SEK 33,569 m (30,338). This corresponds to a gross margin of 56.3 percent (52.7).
• Selling and administrative expenses increased by 3 percent to SEK 26,446 m (25,585). In local currencies the increase was 2 percent.
• Operating profit increased to SEK 7,098 m (4,741), corresponding to an operating margin of 11.9 percent (8.2).
• Adjusted for one-time costs associated with the cost and efficiency programme, operating profit amounted to SEK 7,297 m (4,671), corresponding to an operating margin of 12.2 percent (8.1).
• The result after tax increased by 52 percent to SEK 4,995 m (3,288), corresponding to SEK 3.11 (2.02) per share.
• Significant improvement in cash flow from operating activities, which increased to SEK 12,600 m (7,499).

• The H&M group's net sales increased by 1 percent in the first half-year to SEK 113,274 m (112,488). In local currencies, net sales were in line with the previous year.
• Gross profit increased to SEK 61,224 m (56,224). This corresponds to a gross margin of 54.0 percent (50.0).
• Selling and administrative expenses increased by 1 percent in SEK. In local currencies these expenses were in line with the previous year.
• Operating profit increased to SEK 9,175 m (5,466), corresponding to an operating margin of 8.1 percent (4.9).
• The result after tax increased to SEK 6,196 m (3,828), corresponding to SEK 3.85 (2.35) per share.
• Cash flow from operating activities increased to SEK 16,567 m (12,485).
• Financial net cash increased to SEK 7,961 m (7,700). Cash and cash equivalents plus undrawn credit facilities were SEK 42,572 m (38,813).
• Stock-in-trade decreased by 1 percent to SEK 38,518 m (38,802). Currency adjusted the stock-in-trade increased by 2 percent compared with the previous year. The stock-in-trade in SEK represented 16.3 percent (16.7) of rolling 12-month sales.

• Sales for the month of June 2024 are expected to decrease by 6 percent in local currencies compared with the same period last year. The June figure is to be seen in the light of strong comparative figures from 2023. The unstable weather in many of the H&M group's large markets at the start of June 2024 had a negative impact on sales, but sales recovered as the weather normalised at the end of the month. A well-composed inventory has also enabled a later start to sale compared with the previous year.
• Environmental organisation Stand.earth awarded the H&M group the highest overall score among leading brands in the fashion industry for its climate work.
• At the annual general meeting on 3 May 2024, a general authorisation was passed for the board to be able to buy back the company's own B shares until the 2025 annual general meeting. If the board chooses to utilise this authority, amounts and other details will be communicated before repurchases are initiated.

"We achieved our best results for many years in the second quarter, showing once more the H&M group's strength and robust financial position, with strong cash flow as well as improved profitability and sales. We are now raising our ambitions further to strengthen the brand, the customer offering and the shopping experience. With a focus on our customers, committed colleagues and a faster pace of investment in the second half of the year we see good conditions for continued profitable, long-term and sustainable growth."

- Daniel Ervér, CEO.

* Operating profit adjusted for one-time costs.
 

Comments by Daniel Ervér, CEO

Strong profitability development and good sales growth

The H&M group's profitability performance during the first half of the year was strong as a result of gradual improvements in sales development, a strengthened gross margin and continued good cost control. The spring and summer collections have been very well received, which is reflected in the improved sales in the second quarter. We are seeing growth within all customer groups and a positive trend in all regions. I am proud of all our colleagues who have contributed to our strong development.

With a sharp increase in profit for four consecutive quarters, we are well on the way to achieving our long-term goal of profitability exceeding 10 percent over time. Our goal of an operating margin of 10 percent for full-year 2024 remains in place. However, the conditions for achieving that level this year have become more challenging as it is assessed that external factors that influence our purchasing costs and sales revenues, including materials and foreign currency, will have a more negative impact than we expected in the second half of the year. The most important prerequisite for achieving our goal is that sales growth is further strengthened in the second half of the year compared with the second quarter increase.

In the second quarter we achieved our best profit and cash flow for many years, and now we are taking the next steps with forward-looking initiatives to strengthen the brand, the customer offering and the shopping experience. We have one of the fashion industry's largest design teams that has created amazing collections for this autumn. Our customers will be able to discover what's new this autumn in exciting ways through global and local fashion campaigns, unique events and inspiring collaborations. Our upgraded stores in London, New York, Seoul and Tokyo have been very well received by our customers. In the second half of the year we are increasing the pace of investment and bringing the new store formats with the latest in digital services and a locally adapted assortment into stores to create an elevated experience, including in Paris, Milan, Berlin, Stockholm, Hamburg, Munich and more stores in New York and London. During the spring we have successfully tested an updated online store that we are launching in our larger markets during the autumn. The new digital experience will give our customers more inspiration, clearer recommendations on how our products can be styled and which fit is right for them. We are also continuing to invest in the supply chain, where we are seeing positive effects from better availability of the right products between the channels and greater precision when the lead time from design to the product reaching the customer is shortened.

The H&M group stands strong with a robust financial position, strong cash flow and improved profitability and sales. The situation in the world around us remains uncertain and households continue to have high living costs. As always, our top priority is to ensure the best value for money in each market. With a focus on our customers, committed colleagues and a faster pace of investment in the second half of the year we see good conditions for continued profitable, long-term and sustainable growth in a large and growing market.
 

Communication in conjunction with the six-month report

The six-month report, i.e., 1 December 2023 - 31 May 2024, will be published at 08:00 CEST on 27 June 2024, followed by a combined press and telephone conference at 09:30 CEST for the financial market and media, hosted by CEO Daniel Ervér, CFO Adam Karlsson and Head of IR Joseph Ahlberg. A presentation of the report followed by a Q & A session will be held in English.

Location: H&M's head office in Stockholm, Mäster Samuelsgatan 49, 3rd floor, Ljusgården. The event will be broadcasted online and questions can also be asked by telephone. For log in details please register: https://app.webinar.net/e6RKGdoMZ9A

To book interviews in conjunction with the six-month report on 27 June 2024, please contact: Anna Frosch Nordin, Head of Media Relations, telephone +46 73 432 93 14, anna.froschnordin@hm.com.

Please note that there will not be a separate telephone conference in the afternoon CEST.

Contact

Joseph Ahlberg, Head of IR   +46 73 465 93 92
Daniel Ervér, 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

For more information about the H&M group visit hmgroup.com.
 

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 June 2024. 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.