The Swedish H&M group saw its group revenue decrease by 1% in the fourth quarter and the full year.
Nevertheless, the company managed to increase its profit. After a challenging period, the fashion giant believes it is back on the right track.
Slow but profitable year-end
In the fourth quarter, H&M’s net revenue fell slightly to 62.2 billion Swedish kronor (5.4 billion euros), despite a 4% increase in December. The late arrival of Black Friday meant that most of its revenue was recorded in December, unlike the previous year.
Gross margin rose slightly to 54.6% from 53.7%, while gross profit rose to 33.9 billion Swedish kronor (2.9 billion euros). Operating profit almost doubled to 4.6 billion Swedish kronor (400 million euros).
Acquisitions and innovation halted
For the full fiscal year 2024, net revenue fell 1% to 234.5 billion Swedish kronor (20 billion euros). CEO Daniel Erver said the group’s renewed focus on women’s clothing and the flagship H&M brand had already shown positive results. Operating profit rose 28% to 17.3 billion Swedish kronor (1.5 billion euros), with an operating margin of 7.4%.
The fashion giant plans to focus on organic growth and will temporarily reduce investments in new business models.
This is notable, as the group has expanded in recent years through strategic collaborations and innovations – such as setting up its own test center in Berlin. Many of these projects are now winding down; for example, Monki has been integrated into Weekday; by the end of the year, the first Brazilian H&M store is due to open in São Paulo.
Last year, the group invested mainly in supplier collaboration, shortening product development cycles and increasing the use of RFID technology. The retailer also opened 88 new stores. Erver remains optimistic about growth prospects despite macroeconomic and geopolitical uncertainties.
“After one year as CEO, I am confident we are on the right track. We have set a clear direction, focusing completely on our core business: improving the things that make the biggest difference for the customer and eliminating those that don’t.”
