The H&M group’s sales including VAT increased 4 per cent to SEK 231,771 million (222,865) in the financial year 2017. Sales rose 3 per cent in local currencies. Sales excluding VAT amounted to SEK 200,004 m (192,267). For the reported period, company’s gross profit rose to SEK 108,090 million (106,177). This corresponds to a gross margin of 54.0 per cent.
For the fourth quarter ending November 2017, sales including VAT amounted to SEK 58,481 million (61,098), a decrease of 4 per cent. In local currencies, the decrease was 2 per cent. Sales excluding VAT amounted to SEK 50,407 million (52,720). For the reported period, the gross profit amounted to SEK 27,929 million (30,027), corresponding to a gross margin of 55.4 per cent (57.0).
“Our performance during 2017 was mixed, with progress in some areas but also difficulties in others. We delivered growth of 3 per cent in 2017 which is clearly below our expectations. In the fourth quarter our sales overall decreased by 2 per cent in local currencies. Our online sales and our newer brands performed well but the weakness was in H&M’s physical stores where the changes in customer behaviour are being felt most strongly and footfall has reduced with more sales online. In addition, some imbalances in certain aspects of the H&M brand’s assortment and composition also contributed to this weaker result,” said Karl-Johan Persson, CEO.
A continued roll-out of H&M’s online store is planned to another four markets during the financial year 2017/2018: India, and via franchise to Saudi Arabia and the United Arab Emirates. Kuwait was opened in December 2017 via franchise. In 2018 the H&M group plans to open approximately 390 new stores and approximately 170 store closures are planned, resulting in a net addition of approximately 220 stores. New planned H&M store markets are Uruguay and Ukraine.
“The H&M group is developing new brands for new needs and new segments – we now have eight brands that are all scalable – and we will soon launch our ninth brand, Afound. We will constantly optimise and refine our physical store portfolio. There is still potential for strong growth in some regions whereas in others we can get a better balance by reducing store space. We constantly work on new ideas and innovations that will drive us forward – and there are many in our pipeline for 2018 and the years to come,” concluded Persson.