H&M suffers in third quarter because of expensive dollar

H&M suffers in third quarter because of expensive dollar

Swedish fashion chain H&M may have increased turnover 19 % in the third quarter of its financial year, but the group's profit barely grew because the expensive dollar resulted in higher resource prices.

Increased turnover did not result in higher profits

Hennes & Mauritz's turnover in the 1 June - 31 August period reached 46.024 billion Swedish krona (4.9 billion euro, excluding VAT), up 19 % compared to the same period in 2014. The turnover increase was "only" 11 % in local currency.

 

Profit suffered because of the resource prices: 80 % of H&M's supplies comes from Asia, where the strong dollar is often the currency used for transactions. On average, the dollar soared 24 % higher than the Swedish krona this trimester - compared to the same period last year. Its transport costs also grew.

 

Gross margin at lowest point in 11 years

All this resulted in the lowest gross margin since 2004, a drop from 58.3 % in 2014 to 55.9 % this year. Net profit only reached 5.306 billion krona (560 million euro), barely more than the 5.296 billion krona from last year and well below analysts' expectations.

 

However, H&M is relentless in its expansionist behaviour: the Swedish concern aims to open 400 stores this year, including firsts for India and South Africa. In the upcoming months, it also wants to break through online in Switzerland and Russia, with New Zealand, Cyprus and Puerto Rico up next year.

Questions or comments? Please feel free to contact the editors


Lucas Bols drunk in love with Passoã

16/11/2017

Liquor manufacturer Lucas Bols’ turnover has grown 23.8 % in the first six months of its broken fiscal year, to 48.8 million euro. Aside from 0.5 %, the entire growth is thanks to liquor brand Passoã’s integration.

"Hunkemöller prepares IPO"

16/11/2017

According to financial press agency Bloomberg, investment company Carlyle Group ordered Rothschild bankers to prepare an IPO for Hunkemöller.

Italian Food-focused theme park opens in Bologna

16/11/2017

Fans of Italian cuisine have to head to Italian Bologna, where Eataly World opened, a theme park focused on Italian pasta, wine, pizza and more.

CEO Bernard Deryckere will leave Alpro

16/11/2017

Bernard Deryckere, who was the man behind Belgian dairy company Alpro’s international success, will leave the company after sixteen years. Apparently, he will leave because of differences of opinion with its new owner, Danone.

Ahold USA trials robot in Giant Food Store

15/11/2017

Ahold USA is currently trialing a robot in a Giant Food Store. Its job is to detect dangers and then ask for assistance. He can also point out empty shelves and check prices.

India is promised land for Belgian apples and pears

14/11/2017

India is turning into the promised land for Belgian fruit farmers. It is already Belgian apples’ most important non-European market and Belgian pears are also promoted throughout the country.

Back to top