By Q4 Sales Miss Analyst Forecasts
H&M reported fourth-quarter sales of 62.19 billion Swedish krona, falling short of the projected 63.48 billion krona. While sales were below expectations, they still marked a 3% growth in local currencies, reflecting some resilience in the retail market.
Full-Year Profits Exceed Expectations
Despite challenges, H&M’s full-year operating profit reached 17.3 billion Swedish krona ($1.57 billion), beating the forecast of 17.2 billion krona. Fourth-quarter profits also came in stronger than anticipated at 4.6 billion krona, showcasing effective cost management.
Rising Margins Highlight Profitability Focus
Gross profit for Q4 increased to 33.94 billion krona, with the gross margin improving to 54.6% from 53.7% a year ago. This growth underscores H&M’s efforts to enhance profitability even as it faces stiff competition from brands like Zara and Shein.
Black Friday and Market Pressures
The delayed Black Friday sales in 2024 likely impacted Q4 revenue. H&M has also struggled with rising costs and intense competition, which led to the removal of its profit margin goals earlier in the year.
Leadership Aims for Sustainable Growth
CEO Daniel Ervér, who took the reins in January 2024, is steering H&M toward a more sustainable growth path. His strategy focuses on cost efficiency and investments in popular fashion lines and online platforms.