Sales Fall Short of Estimates
H&M posted Q4 sales of 62.19 billion Swedish krona, falling below analyst expectations of 63.48 billion krona. However, local currency sales rose by 3%, signaling modest growth in a tough retail environment.
Profit Beats for the Full Year
The company’s full-year operating profit came in at 17.3 billion krona ($1.57 billion), slightly ahead of the 17.2 billion krona estimate. Q4 operating profit also surpassed expectations, reaching 4.6 billion krona, driven by disciplined cost management and robust online sales.
Margins Improve Despite Market Headwinds
Gross profit for the quarter climbed to 33.94 billion krona, with a gross margin of 54.6%, up from 53.7% the prior year. These gains came as H&M faced mounting competition from fast-fashion giants Zara and Shein.
Holiday Sales and Challenges
The late Black Friday in 2024 and rising operational costs impacted H&M’s revenue during the holiday season. The company has been grappling with market pressures, forcing it to abandon profit margin goals earlier in the year.
Leadership Focus on Revitalization
Under CEO Daniel Ervér’s leadership, H&M is honing in on cost controls and core business improvements. His vision includes strengthening the brand’s online presence and addressing competitive challenges to secure long-term growth.
