H&M Slips To Loss In Q4, Sales In New Year Rise; Plans SEK 3 Bln Buyback; Backs FY24 Margin View

Swedish retailer Hennes & Mauritz AB or H&M Group (HNNMY.PK,HMRZF.PK,HEN.L) reported Friday that its fourth-quarter result after tax was a loss of 864 million Swedish kronor or 0.53 krona per share, compared to prior year's profit of 4.62 billion kronor or 2.79 kronor per share.

The results were impacted by a one-time cost of 836 million kronor for the cost and efficiency programme.

Operating profit was 821 million kronor, sharply lower than last year's 6.26 billion kronor. Operating margin was 1.3 percent, compared to 11 percent a year ago.

Gross profit amounted to 31.01 billion kronor, slightly lower than 31.34 billion kronor a year ago. This corresponds to a gross margin of 49.7 percent, down from 55.2 percent last year.

Net sales, however, increased 10 percent to 62.43 billion kronor from 56.81 billion kronor last year. In local currencies, net sales were flat. Excluding Russia, Belarus and Ukraine, the increase was 11 percent in SEK and 2 percent in local currencies.

Regarding the current trading, the company reported that the new year sales, in the period from December 1, 2022 to January 25, 2023, increased by 5 percent in local currencies. Excluding Russia, Belarus and Ukraine sales increased by 9 percent in local currencies.

Further, the board of directors is proposing an ordinary dividend of 6.50 kronor per share to the annual general meeting to be paid in two instalments.

The board of directors will also ask the 2023 annual general meeting for authorisation to buy back its own B shares in the period up to the 2024 annual general meeting for a maximum of 3 billion kronor.

Looking ahead, Helena Helmersson, CEO, said, "Sales in the new financial year have started well. The external factors are still challenging, but are moving in the right direction. Combined with our investments and efficiency improvements, there are very good prerequisites for 2023 to be a year of increased sales, and improved profitability. Thus, our goal of achieving a double-digit operating margin for full-year 2024 remains in place."

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