H&M sales up 7% as it prepares to launch new brands
- Author: Darren Santiago Feb 02, 2017,
Feb 02, 2017, 0:43
The Swedish retail giant updated its growth target alongside annual results Tuesday. "Our brands COS, & Other Stories, Monki, Weekday and H&M Home had apart from strong online sales growth also very good store sales".
H&M said the local-market targets will allow it to account for both online and in-store sales.
Swedish clothing retailer Hennes & Mauritz (H&M) has reported a rise in fourth quarter net profits although the strong U.S. dollar pushed up purchasing costs. However, they won't give a full picture of how the markets are helping or hurting the company's global top line: With targets set in local currencies, a market could outperform the goals but still be a drag on the overall company because of currency moves.
The group, whose profits have fallen for five straight quarters said its fiscal fourth-quarter pretax profit rose to 7.4 billion crowns ($839 million) from a year-ago 7.2 billion.
H&M, which had unveiled earlier a weaker than-expected turnover for the fiscal quarter, as well as for December, said sales in January 1-29 were up 11 percent in local currencies.
Sales excluding Value-Added Tax amounted to 52.72 billion kronor, compared to 48.69 billion kronor in the previous year.
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H&M further said it plans to open approximately 430 new stores net in the 2016/2017 financial year.
The company said its outlook was rephrased from previous target of increasing the number of stores by 10 to 15 percent per year. "The year was characterized by the shift in the industry towards an ever growing online market and by digitalization". Shares were up 5.5% in midday trading. However, net income dropped almost 11% to 18.6 Billon krona ($2 Billion).
The Board of Directors proposes a dividend of 9.75 Swedish krona (1.10 dollars) per share for the 2015/2016 financial year. Sales were 222.87 billion kronor, up 6% from 210 billion kronor a year earlier.
"With e-commerce and omnichannel the market is quickly becoming increasingly complex, which means new demands for speed and flexibility", Vinge said.
"This was particularly visible in France, Germany, Switzerland and Italy as well as in the USA and in China", he added. Last year, Mr. Persson warned of the dangers that the Brexit vote might pose to business.