The H&M group’s net sales have increased by 11 per cent to SEK 108,489 mn in the first half-year. In local currencies, the net sales have improved by 5 per cent. The ongoing transformation work has contributed significantly to continued positive sales development with more full-price sales, lower markdowns and increased market share.

In the second quarter of fiscal 2019, H&M group’s net sales hiked by 11 per cent to SEK 57,474 mn. In local currencies, net sales increased by 6 per cent compared with the corresponding quarter last year. Gross profit amounted to SEK 31,825 mn. This corresponds to a gross margin of 55.4 per cent.

“The H&M group continues to increase full-price sales, reduce markdowns and increase market share, showing that customers appreciate our collections and the improvements we are making to the product assortment and the customer experience,” said Karl-Johan Persson, CEO. In April, H&M became the first big fashion brand in the world to provide detailed information concerning the factory and material for individual garments to help customers make more sustainable choices.

“By continuing to integrate our physical and digital channels we are making the shopping experience inspiring, easy and convenient for customers wherever we meet them. This and other extensive investments are driving costs in the short term. For example, our new online platform and our new logistics systems have not yet achieved full efficiency, but for customers have resulted in improvements such as faster and more flexible deliveries and a more seamless shopping experience.

We have also increased the value for our customers through further investments in the customer offering so that we offer the best combination of fashion, quality, price and sustainability. We have continued to develop our new digital features and during the spring we also substantially expanded H&M’s customer loyalty programme, which now has more than 43 mn members,” explained Persson.

The company is accelerating its adaptation to customers’ changed shopping patterns and has therefore revised the number of new stores downwards in favour of even more digital investments. The net addition of new stores for full-year 2019 will therefore be around 130, which is 45 fewer than previously communicated. Thailand, Indonesia and Egypt will become new H&M online markets via franchise during the second half of 2019.

“Our transformation work in response to the rapid shift in fashion retail is continuing at full speed. While the costs of this have held back profitability in the short term, we remain convinced that our focus on meeting customers’ increased expectations will contribute to a gradual increase in profitability and to long-term positive development for the H&M group,” concluded Persson.