H&M, the Swedish clothes retailer, declared victory over the epidemic on Friday, claiming a higher-than-expected increase in quarterly profit and increasing investments with the goal of doubling sales by 2030.
In early trading, shares in the world’s second-largest clothes retailer jumped 5 per cent after the company said it would quadruple its spending in 2022 to about 10 billion Swedish crowns ($1.1 billion) to assist meet its new goal.
Technology, the supply chain, renewable energy, and sustainable materials will be prioritized, according to the report.
“We ended the year strongly, with sales back at the same level as before the pandemic and with profitability better than it has been for several years,” CEO Helena Helmersson said.
“Now that we are back to a more normalized situation with a strong financial position and good profitability, we can fully focus on growth again.”
Pretax profit in H&M’s fiscal fourth quarter, September-November, increased by 64 per cent year on year to 6.00 billion crowns ($640 million). Refinitiv polled analysts, who predicted a profit of 5.43 billion crowns on average.
“The strong result for the quarter is mainly a result of well-received collections with more full-price sales, lower mark-downs, and good cost control,” H&M said in a statement.
It claimed that recent technological advancements and efforts to improve the efficiency of its supply chain have minimized the effects of product supply disruptions.
Profit was up 43 per cent in the fourth quarter of 2019 compared to the fourth quarter prior to the epidemic.
Despite supply chain issues, H&M, like its biggest rival Inditex, the owner of Zara, is recovering from the pandemic. find out more
The Swedish company requested a 6.50 crown ordinary dividend paid in two installments, as well as a 3 billion crown share repurchase program.
H&M said it now aims to treble sales by 2030 compared to 2021 while halving its carbon footprint and achieving an operating profit of more than 10% by 2024.
Sales reached 199 billion crowns in 2021, with an operating margin of 7.7%. Pretax profit was 14.3 billion crowns, compared to 13.5 billion crowns expected by analysts.
H&M said that it would no longer accept supplies made with coal-based energy in order to reduce its carbon footprint.
On other hand, the world’s largest luxury goods giant, LVMH, saw its stock rise on Friday after reporting an uptick in fourth-quarter sales growth.
In early session trade, LVMH shares were up 3.9 percent, and the jump in LVMH also boosted shares of luxury goods rivals like Kering and Hermes.
LVMH, which owns brands ranging from Hennessy cognac to Sephora cosmetics, announced on Thursday that its sales for the fourth quarter had grown, hitting 20.04 billion euros ($22.31 billion) overall, and the growth was led by Louis Vuitton and Dior, the French group’s top earners.
On a like-for-like basis, the premium labels drove a 28 per cent increase in sales of LVMH’s largest division, fashion and leather goods, exceeding analyst projections of 16 per cent growth. The company’s revenue in the last three months of last year was 51% higher than it was before the pandemic in 2019. (Adapted from Reuters.com)