H&M Q4 operating profit in Russia exit and one-time costs – WWD

Paris – H&M Group Russia’s exit and one-off costs saw the retailer’s profit fall in the three months to November 30.

In the fourth quarter of its fiscal year, H&M’s operating profit was 821 million Swedish kronor, or $79.7 million, down 86.9 percent from 6.26 billion kroner a year earlier.

“The lower profit in the fourth quarter compared to the same quarter last year was mainly explained by negative external factors, the loss of operating profit previously contributed by Russia and the one-time cost of the cost and efficiency program,” the Swedish fast fashion retailer said on Friday.

The group announced a cost-cutting program in September that will reduce overheads, simplify its organizational structure, facilitate faster decision-making and eliminate layers. The changes are expected to take around six to nine months and will bear fruit from the second half of 2023.

By the end of November, the H&M group said it would cut its workforce by around 1,500 workers.

It’s been a tough season for fashion wholesalers, as consumers tighten their purse strings amid rising inflation.

H&M also said at the start of its new fiscal quarter, sales between December 1 and December 25 in 2022 rose 5 percent in local currencies over the same period in 2022. Excluding Russia, Belarus and Ukraine, the company’s sales increased by 9 percent. Local currencies.

“Sales in the new financial year are off to a good start,” said Helena Helmersen, CEO of the H&M Group. “External conditions are still challenging, but they are moving in the right direction.

“Combined with our investments and efficiency improvements, there are excellent prospects for increased sales and improved profitability in 2023,” she continued. “Therefore, our goal of achieving a double-digit operating margin for the full year 2024 remains the same.”