Fast fashion giant H&M Group closes a net of 50 stores in the second quarter

Last week, fast fashion giant H&M Group released its financial report for the second quarter and first six months ending May 31, 2024.

The data showed that H&M Group's net sales in the second quarter increased by 3% year-on-year to SEK 59.605 billion. In local currencies, net sales grew by 3%. Gross profit increased by 11% to SEK 33.569 billion. Operating profit rose to SEK 7.098 billion, corresponding to an operating margin of 11.9%. Operating cash flow significantly improved to SEK 12.6 billion.

Net sales for the first half of the year increased by 1% year-on-year to SEK 113.274 billion. In local currencies, net sales remained flat compared to the previous year. Gross profit increased to SEK 61.224 billion. Operating profit increased to SEK 9.175 billion, with an operating margin of 8.1%. Operating cash flow increased to SEK 16.567 billion.

Among them, the Eastern European market performed exceptionally well with a 18% year-on-year increase of sales in Q2, while the Asian, Oceania, and African markets declined by 2%. The Group opened only 8 new stores and closed 58, resulting in a net decrease of 50 stores during the quarter. Nearly all sub-brands, including H&M, were involved in store closure adjustments. As of the end of this quarter, H&M Group operates a total of 4,319 stores.

CEO Daniel Ervér commented, "We achieved our best quarterly performance in many years in the second quarter, demonstrating once again the strength and robust financial position of H&M Group, with strong cash flow, improved profitability, and sales growth." He added, "With the significant increase in profit margins for four consecutive quarters, we are gradually approaching our long-term goal of achieving a profit margin exceeding 10%. Our target of reaching a 10% operating profit margin for the full year 2024 remains unchanged."