H&M Q1 turnouts drive on dollar pressure
Swedish Fashion industry is also worldwide famous and Swedish fashion group H&M (Hennes & Mauritz) noticed turnouts drive in its first quarter though it was not up to that expected level, as the purchasing became more expensive because of the weak US dollar impact.
Earning outcomes aggregated to SEK2.54bn (US$306.6m) from SEK3.61bn in the period of last year. US impacted quite negatively, profits were also knocked by the incremented deflation and the reason was the excessive volumes of winter apparels remaining after the warm fall. There are certain statistics in which gross boundary cramped slightly, to 52% from 55.2% past year. Group sales, however, mounted 8% to SEK50.62bn from SEK46.79bn.
H&M declared these statistics as “very satisfactory” sales and profit progress for its online sales and purchase division. Total 11 new online markets will be included in 2016, taking the total to 34 markets, which includes Canada, Greece, Japan and South Korea. The group also deals to include round about 425 stores in the new financial year, mainly in existing markets and also in new markets including New Zealand, Cyprus and Puerto Rico.
CEO Karl-John Persson, stated: “An important part of our long-term work on further strengthening the group’s future market position is our ability to offer customers a wide selection of brands with different identities. Our new brands – Cos, & Other Stories, Monki, Weekday and Cheap Monday- represent an increasingly important part of the group and we are looking forward to launching more new brands further ahead.”
Bernstein analyst Jamie Merriman noted that while the consequences were above the accord and assumptions, there continues to be external pressure on the business.
“In the next 12 months, US dollar pressure will ease; however, we still see potential for long-term margin compression given the competitive environment. Consensus expects gross margin for the full year to be down 110bps, which seems low given ongoing US dollar pressure in Q2 and Q3, and the weak sales growth delivered year-to-date.”