Swedish Apparel H & M Group Disclosed Financial Report For The First Quarter Of Fiscal Year 2022

Recently, Swedish apparel retailer H & M group disclosed the first quarter financial report of fiscal year 2022.

It is understood that in the three months ending February 28, 2022, H & M Group sales increased by 18% to SEK 49.1 billion (about RMB 33.324 billion), with a gross profit margin of 49.3%. Operating profit and net profit recorded SEK 458 million and SEK 217 million respectively, which were significantly higher than the losses of SEK 1128 million and 1.07 billion in the same period of the previous year.

But the overall profit level is still lower than analysts expected. After the release of the performance report, H & M group's share price fell 11%, the biggest drop in two years, and the company's market value evaporated $2.4 billion.

Affected by geopolitical conflicts, H & M closed 227 stores in Eastern Europe in March, including 170 in Russia, according to the report. Russia is H & M's sixth largest regional market, accounting for about 4% of global sales. Affected by this, H & M group's sales increased by only 6% in March.

Currently, Asia Pacific and Africa are H & M group's third largest regional market in the world, with revenue down 9% in the quarter. The American market and Western Europe market grew significantly, with 26% and 35% sales growth respectively.

According to the financial report, H & M group only opened two new stores for arket and H & m home in the first quarter. As of February 28, the total number of its brand stores was 4721, a decrease of 228 over the same period of last year. H & M plans to open and close 95 stores and 240 stores in 2022, respectively, according to H & M's financial report.

In 2022, H & M plans to expand into more markets. In March, H & M opened its first store in Cambodia. In 2022, it plans to expand to Ecuador, Kosovo, northern Macedonia, Costa Rica and Guatemala. H & M plans to open its first store in Albania in 2023.

In China, more than 40 h & M stores have been temporarily closed due to a new outbreak. The large H & M flagship store, once located on West Nanjing Road in Shanghai, has been closed after the lease expires in June 2021, and the size of stores in other cities has shrunk. Monki recently announced that it would withdraw from the Chinese market. Tmall's flagship store has stopped selling goods since April 1, while offline stores of the Department are clearing off their positions.

In order to cope with market changes, H & M Group intends to position medium and high-end brands in China such as cos, & Other Stories and arket.

H & M group pointed out in the financial report that it will invest about SEK 10 billion to promote the transformation in 2022, and it is expected that the overall revenue will double by 2030. In view of the supply chain problems that have plagued the global apparel industry recently, H & M group said that it would implement the price increase strategy. Price hikes have become a consensus in the fast fashion industry, with market research firm Lectra reporting that Zara and H & M raised prices by 23% and 13% respectively from August to December 2021.