H&M's annual profits rise despite disappointing golden quarter

According to CEO Daniel Ever, H&M Group - responsible for H&M, Weekday, COS, Monki, & Other Stories and Arket - is 'on the right track' after reporting a 28% increase in operating profit to £1.2 billion (SEK 17.3 billion) for the year ending 30 November 2024.

For the fourth quarter, from 1 September to 30 November 2024, the retail giant’s net sales amounted to £4.54 billion (SEK 62.19 billion). Gross profit increased to £2.48 billion (SEK 33.94 billion) with a gross margin of 54.6%. Meanwhile, operating profit increased to £340 million (SEK 4.62 billion), with an operating margin of 7.4%.

For the full year, from 1 December 2023 to 30 November 2024, H&M group’s net sales amounted to £17.12 billion (SEK 234.47 billion). Gross profit increased by 4% to £9.15 billion (SEK 125.29 billion) with a gross margin of 53.4%. Operating profit increased by 28% compared with the previous year excluding the result from investments in associated companies and joint ventures.

Daniel Ervér, CEO of H&M Group, said: "After one year as CEO, I’m confident that we are on the right track. We have set a clear direction focusing fully on our core business: improving what makes the biggest difference for the customer and removing what doesn’t. We are proud of the progress we have made to further strengthen our products, shopping experience, and brand building. While there is a lot left to do, we have a strong plan to drive the long-term growth we are aiming for."

During the year, H&M Group opened 88 new stores and closed 204 as it continued to optimise its store portfolio. "Upgrading our store portfolio will remain a priority for us", said Ervér. H&M will open its first stores in Brazil, in São Paulo, towards the end of this year.

Ervér added: "As we look ahead to 2025, we will continue to strengthen our core business and elevate our customer offering, while continuing the strong work on cost efficiency. We speed up our product creation processes, increase the precision in aligning supply with demand, and improve the product availability for our customers online as well as in stores by integrating both channels more closely with each other.

"We will also enhance our digital experience and continue to reinforce our brand presence in major fashion cities.

"While continued challenging macroeconomic conditions and geopolitical uncertainty may impact the consumer sentiment during 2025, we see some positive signs such as inflation and interest rates going down... This, together with our business idea - fashion and quality at the best price in a sustainable way - creates a strong resilience and positions us well for growth in the global fashion market."

Looking ahead, in light of the economic environment, the H&M Group has three long-term targets: long-term sales growth of at least 10% per year, an operating margin that exceeds 10% and a 56% reduction in greenhouse gas emissions.