Clothing chain H&M’s business suffers from high energy and purchasing costs. However, the company management is hopeful for the new financial year.
Due to high energy costs and one-off charges for the savings program that was introduced, the result of the clothing chain H&M collapsed in the past financial year. In addition, the increase in raw material and freight costs in connection with the strong US dollar led to significant purchasing costs, said boss Helena Helmersson when presenting the annual report for the past financial year 2021/2022 (until the end of November) in Stockholm.
The decision was made not to pass the full cost on to customers, and investors shouldn’t suffer either. Helmersson now expects a tailwind in the new year.
Net profit falls to almost 3.6 billion crowns
Above all, the profitability of H&M in the final quarter fell short of expectations and the operating profit for the year fell by more than half to 7.17 billion Swedish crowns (642 million euros). Net profit fell even more sharply to almost 3.6 billion crowns. As in the previous year, the management proposes a dividend of 6.50 crowns per share.
According to Helmersson, the external factors should now reverse in the new financial year, and she also reported on a satisfactory Christmas business. Sales in the new fiscal year got off to a good start. “The external factors are still challenging, but they are moving in the right direction,” said the manager. In combination with investments and cost savings, the conditions are very good for 2023 to be a year with increasing sales and improved profitability. The goal of achieving a double-digit operating margin for the full year 2024 therefore remains.
Source: Stern
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
