H&M sales, including VAT, grew by 9 per cent to SEK113.907 billion (US$13.4 billion) for its first half.
Sales excluding VAT for the Swedish fashion group amounted to SEK98.368 billion, while profit after tax amounted to SEK8.354 billion.
For the second quarter, sales including VAT increased by 10 per cent to SEK59.538 billion, or SEK51.383 billion excluding the tax.
Gross profit increased by 9 per cent to SEK29,345, corresponding to a gross margin of 57.1 per cent. Profit after tax reached SEK5.897 billion.
H&M attributes the increases to continued expansion and tight cost control, including continued rapid and profitable growth of its online sales, which in some established markets already account for 25 to 30 per cent of total sales.
H&M’s online store opened in a further six new markets, including Hong Kong, Macau, Malaysia, Singapore and Taiwan, with the Philippines to come in the next few months and India next month.
Stores were also opened in new markets, including Vietnam.
China a challenge
CEO Karl-Johan Persson says some of the group’s major markets were challenging, including China.
However, he says there are “great opportunities” for the group with the shift to online shopping. “We are in a strong position, with well-known global brands suited to both physical stores and online sales, and we are financially strong and can invest at the pace required.”
He says H&M plans to improve, diversify and expand its online offering with, for example, more and faster delivery options, more payment alternatives, a broader range of products and new markets.
Physical stores will be integrated with the online store, and the store portfolio will be expanded and optimised.
“An important part of the H&M group’s strategy is to develop, launch and build new global brands,” says Persson. “A good example of this is Cos, which will reach revenues of around 10 billion Swedish krona this year with profitability in line with that of the H&M brand. The value of Cos today already far exceeds the amount we invested in it, and this is just the beginning of the journey.
“Our other brands, & Other Stories, Cheap Monday, H&M Home, Monki and Weekday, are very well-positioned to make the same journey as Cos.”