SWEDEN: H&M Q1 profit hit by currency, costs
- Q1 net profit down 30% to SEK2.618bn
- Sales down 1% to SEK24.5bn
- CEO champions “long-term” strategy
Clothing retail giant H&M Hennes & Mauritz posted a slimmer first quarter profit, hit by external factors including currency movements and cost inflation in sourcing markets.
Sales were up 9% in local currencies in the three months to 28 February, and rose 1% on a like-for-like basis, but fell 1% in reported terms thanks to the strength of the Swedish kroner.
H&M added that its sales for the 1-29 March period were up 3% in local currencies, despite strong comparatives including last year’s earlier Easter holiday.
Company CEO Karl-Johan Persson said the quarter had been characterised by a “continued tough market”, with many external factors exerting a negative influence on performance.
“These external factors, which were beyond our influence, were for example strong negative currency effects and cost inflation in the sourcing markets with, for example, significantly higher cotton prices,” he said.
“Instead of passing on these cost increases to customers, we chose to strengthen our price position in order to build further on our strong market position for the long term.”
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