H&M grows fast despite Russian exit

Swedish H&M Group saw its sales rise by 12 % this financial year, but last quarter sales stagnated in local exchange rates – partly because now all Russian shops are closed and China renewed some pandemic lockdowns.

Beaten by rival

In its financial year 2022, from 1 December 2021 to 30 November 2022, net sales increased 223.57 billion Swedish crowns (20.5 billion euros), but that was only + 6 % in local currency. The war in Ukraine prompted a withdrawal from three markets (Russia, Belarus and Ukraine); H&M believes that including those countries, total sales would have grown by 15 %. The cost-of-living crisis is also a factor, and H&M again appears to be struggling more than rival Inditex, whose sales climbed 19 % to 23.1 billion euros in the first nine months of the financial year.

In the past fourth quarter (September to November), sales at H&M rose 10 % to 62.54 billion (5.7 billion). However, at local exchange rates, sales were unchanged from last year. This was not only because operations in Russia and Belarus were terminated during the quarter, but also because thirty shops in China had to close temporarily due to new Covid outbreaks. Small consolation: even Inditex reported a small slowdown in growth in recent months.

H&M did not disclose anything about its profit figures: that will only happen at the end of January. However, it is doubtful that the world’s second largest fashion retailer will then announce as strong a profit jump as market leader Inditex. Back in November, CEO Helena Helmersson announced that H&M was cutting 1,500 jobs and would have to make annual savings of two billion Swedish crowns (200 million euros).