H&M Net Profit Fell 21.5% In The First Half Year.

Recent news, though in recent years H&M Has been in a radical expansion, but the sales figures are not pretty. The report shows that the gross profit margin of H&M in the first half of the year was 54.9%, down from 57.4% in the same period last year, and the cost of management and marketing rose all the way in the past four years. However, H&M CEO recently released heavy news: online and offline stores are almost the same, the next step is to integrate two sales channels to complement each other.

Net profit fell 21.5% in the first half year.

According to the financial report, the gross profit margin of H&M in the first half of the year was 54.9%, lower than 57.4% of the same period last year, and the profit after tax was 7 billion 902 million kronor, which totaled 4.77 kronor per share, down 21.5% from the same period last year. During this period, tax related turnover increased by 5%, which was 104 billion 970 million Swedish kronor, rising by 7% in local currency, but significantly lower than the two digit growth rate in the same period last year.

The gross profit in the second quarter was 26 billion 980 million kronor, with a gross margin of 57.6%, down from 59.4% in the same period last year. The group's net profit of SEK 5 billion 375 million was 3.24 kronor per share, down 16.9% from the same period last year.

H&MCEO attributed the main reason for poor performance to more than one in March and April. market The cold weather is not conducive to us dollar, new discount activities and long-term investment.

Rising costs: offline stores, IT, logistics and online expansion

Looking at the H&M earnings report, the weather, exchange rate and promotion are all accidental factors. Long term investment is a pain spot throughout the year. CEO always needs to explain where the money has gone. Over the past three or four years, H&M's investment figures have been rising. The results showed that the cost of marketing and management costs increased by 9.5%, 7.5%, 17.8% and 20.1% in the past four years, mainly for offline stores, IT and logistics, and online expansion.

At present, H&M has more than 4000 stores in the world, covering 62 markets. Over the past 5 years, the number of H&M stores has maintained a growth rate of 10-15%, and the total number of stores in the 2011-2015 years has been 2472, 2776, 3132, 3511 and 3924 respectively. About 425 new projects are planned this year, with emphasis placed on China and the United States. In addition to continuing to set up the existing market, H&M has also declined to expand new countries, such as Puerto Rico and Cyprus. 4-5 markets will be added next year, and Columbia has been identified.

Hm.com has a high profit and is the main source of income.

Of course, the momentum on the H&M line is also very strong, opened in 1998. online shopping In 2006, it expanded dramatically. In the first half of this year, 9 new online markets, including Japan and Greece, totaled 32. This year's target covers 34 markets, and will enter Canada and South Korea this fall. The results will continue in 2017.

H&M has always emphasized that online is not just about volume, but also profit. In the earnings report, there is no explicit data on the sale of electricity supplier, IR official revealed: "hm.com profits are very high, which is an important source of revenue for us."

H&MCEO also expresses recognition to the relevant investment of electric business: "in recent years, the investment in IT and online has made H&M a lot of money in the field of e-commerce, and it can continue to expand to more countries."

Lowering investment budgetary channels and upgrading

After several years of triumph, in June this year, H&M lowered its annual investment budget from 135-140 billion Swedish kronor to 125-130 billion Swedish kronor. Analysts speculate that this means that the burning of H&M has come to an end.

However, CFO expressed the hope that the outside world should not be over interpreted: "this is only a financial adjustment in the middle of the year. H&M will still keep the pace of 10-15% opening up, and next year's investment budget may also rise. Of course, we will ensure that it will not exceed the existing overall level."

In response to the challenge of burning money, he responded: "in the past three or four years, H&M's long-term investment has indeed increased rapidly. But now it can be clearly seen that H&M is beginning to maintain a balance between the ideal business and investment. In the future, efforts will continue to make investment levels more reasonable. "

In addition, H&M also revealed that the company's efforts initially showed results. "We have invested a lot in the Internet before, and now the returns are beginning to show up, so it will not be as radical as it was at the beginning, and it is now in a stage of gradual development."

Obviously, the ambition of H&M is not limited to the number of cloth shops. What it wants to do is brand O2O. CEO announced that the number of stores has reached a certain level in the latest earnings report, and the following goal is to upgrade channels.

Integration of online and offline resources, the specific performance is: online order, to store pick up, store online return and sweep code purchase. Among them, online ordering and picking up goods are still being tested; store online returns have entered 10 countries and are ready for further promotion; scan code purchase has covered all online markets. In addition, H&M is exploring the means of payment, distribution mode and the last mile solution.