H & M Hennes & Mauritz AB Six-month report
1 December 2012 – 31 May 2013
• The H&M Group’s sales including VAT increased in local currencies by 5 percent during the first six months of the financial year. Sales in comparable units decreased by 4 percent. Converted into SEK, sales excluding VAT amounted to SEK 60,027 m (59,491), an increase of 1 percent.
• Profit after financial items amounted to SEK 9,359 m (10,754). The Group’s profit after tax amounted to SEK 7,113 m (7,958), corresponding to SEK 4.30 (4.81) per share. Substantial negative currency translation effects and long-term investments during the period make it difficult to compare the results with the corresponding period last year.
• The H&M Group’s sales including VAT increased in local currencies by 5 percent during the second quarter. Converted into SEK, sales excluding VAT amounted to SEK 31,635 m (31,658). Sales in comparable units decreased by 4 percent.
• Continued substantial negative currency translation effects as a result of the continued strengthening of the Swedish krona against most sales countries’ currencies. The reported sales of SEK 36,923 m including VAT would have been approximately SEK 1.8 billion higher using the same currency rates as in Q2 2012.
• Gross profit amounted to SEK 19,337 m (19,546), corresponding to a gross margin of 61.1 percent (61.7). Increased markdowns have negatively affected the gross margin by 0.9 percentage points in relation to sales compared to the corresponding quarter last year.
• Profit after financial items amounted to SEK 6,125 m (7,053). The Group’s profit after tax amounted to SEK 4,655 m (5,219), corresponding to SEK 2.81 (3.15) per share, a decrease of 11 percent.
• A successful start for & Other Stories and continued very good performance by COS.
• Sales have got off to a good start in June. Sales increased by 14 percent in local currencies in the period 1 June – 17 June 2013 compared to the same period last year.
Comments by CEO Karl-Johan Persson
“The second quarter has been a period of intense activity, with the opening of nearly 100 new stores. We have for example, opened our first store in the southern hemisphere in South America – in Santiago de Chile. The store has had a fantastic reception from customers. We are continuing our strong expansion in Asia where we now have 200 stores and where we are now starting to establish our newer brands like COS and Monki.
This quarter has been marked by substantial negative currency translation effects, which have had a negative impact on both sales and profits in SEK. Sales in local currencies increased by 5 percent. Although sales remained strong in Asia, overall sales were not satisfactory mainly due to the continued challenging situation for the fashion retail industry as well as unfavourable weather in March and a couple of weeks into April in many of our big markets.
At H&M we take a long-term perspective and we are continuing with our investments in IT, online sales, new brands and broadening the range. Although most of these long-term investments have not yet generated revenues, we see them as wise and necessary – all in order to build an even stronger H&M. The fantastic response that our new brand & Other Stories has had from customers is one example of an investment that has already borne fruit. During the quarter we opened our first seven stores of this new brand, in cities such as London, Paris and Milan. COS continues to perform very well and the strong expansion of the brand continues both in existing markets and in new markets such as Turkey and Switzerland, where we will be opening COS stores in the autumn.
There is great potential in the growing online market. We are looking forward to launching our online sales in the US in August. In parallel, we are continuing our work on the global roll-out of H&M’s online store, with the aim of adding several new online countries during 2014.”
The information in this Interim Report is that which H & M Hennes & Mauritz AB (publ) is required to disclose under Sweden’s Securities Market Act. It will be released for publication at 8.00 (CET) on 19 June 2013.
H & M Hennes & Mauritz AB (publ) was founded in Sweden in 1947 and is quoted on NASDAQ OMX Stockholm. The company’s business concept is to offer fashion and quality at the best price. In addition to H&M, the group includes the brands COS, Monki, Weekday, Cheap Monday, & Other Stories as well as H&M Home. The H&M Group has more than 2,900 stores in 49 markets including franchise markets. In 2012, sales including VAT were SEK 140,948 million and the number of employees was more than 104,000. For further information, visit www.hm.com.
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