STOCKHOLM (dpa-AFX) - Swedish clothing major Hennes & Mauritz AB or H&M Group (HNNMY.PK, HMRZF.PK, HEN.L) reported Thursday sharply lower profit in its first quarter, despite higher net sales.
For the quarter, net result attributable to shareholders fell to 590 million Swedish Kronor from last year's 1.24 billion kronor. Earnings per share were 0.37 krona, down from 0.77 krona a year ago.
Operating profit amounted to 1.20 billion kronor, down from prior year's 2.08 billion kronor. Operating margin of 2.2 percent dropped from 3.9 percent last year.
H&M group's net sales in the first quarter increased 3 percent to 55.33 billion kronor from 53.67 billion kronor a year ago. In local currencies, net sales increased by 2 percent with around 3 percent fewer stores compared with the previous year.
Sales development was good in western, southern and eastern Europe, with positive development in Germany and Poland. Online sales continued to develop well, the company noted.
The stock-in-trade amounted to 41.01 billion kronor, a growth of 9 percent compared with the previous year.
Looking ahead, H&M group expects its sales in the month of March to increase by 1 percent in local currencies compared with the previous year.
The cost of markdowns in relation to sales in the second quarter is expected to increase somewhat compared with the corresponding quarter the previous year.
Further, the company said its annual general meeting will be held on May 7 to resolve, among other things, on the board's proposed dividend of 6.80 kronor per share, to be paid in two instalments.
The AGM will also resolve on a general authorisation allowing the board to buy back the group's own B shares in the period up to the 2026 annual general meeting.
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