Profit H&M fell by a third due to warm weather

Net profit of the Swedish company H&M, owns one of the world’s largest networks of stores in the clothing trade, in the first quarter of the 2016 financial year fell by almost 30%. For the period from December 2015 to January 2016 the profit of the company amounted to 2,545 billion Swedish kronor ($312.8 million) against 3,613 billion kronor in the previous winter.

“The profit of the first quarter of strong negative impact of the strengthening of the dollar, greatly increased the cost of our purchases, and the increase in the discount [which we were compelled to give] due to large stocks of winter clothing remaining unsold because of the warm autumn”, — said the head of H&M Karl-Johan Persson, whose words are in the message of the company.

Persson acknowledged that a strong dollar continues to put pressure on the results of H&M in the second quarter of 2016, noting at the same time that the negative impact is gradually reduced.

Revenue at H&M in the first quarter of 2016 increased by 8% to VAT 43,691 billion kroons. In local currencies the revenue of the group H&M increased by 9%, including Italian and American units — 11%, Chinese 6%, Dutch 4%, British 1%.

The total number of stores in company-owned Swedish brands (H&M, COS, & Other Stories, Monki, Weekday, Cheap Monday), in the first quarter of 2016 increased by 46, to 3970. While most new outlets were opened in China (plus 12) and the USA (plus 11).

According to Persson, this spring H&M will open major stores in India, South Africa, Switzerland and Hungary, and in April 2016 plans to increase the total number of its outlets to 4 million H&M emphasized that this year the company plans to open online trading their goods in 11 countries — Greece, Ireland, Japan, Latvia, Lithuania, Luxembourg, Slovenia, Croatia, Estonia, South Korea and Japan, which will bring the total number of countries where H&M is available to buy via the Internet, 34.