The H&M group has reported a year-on-year 11% increase in gross profit to SEK 25.52bn (£2bn) in the three months to 28 February, up from SEK 23.04bn (£1.9bn)
The Swedish retailer’s sales increased by 10% year on year to reach SEK 51.01bn (£4.2bn) in the first quarter, up from SEK 46.2bn (£3.8bn). Gross margin increased to 50% from 49.9%.
Net sales in local currencies increased 4%. H&M transitioned its online platform in Germany in the period, and held back on promotional activity to ensure a smooth transfer, “which had a dampening effect on sales”. Adjusted for Germany’s online sales, total net sales increased by 6% for the three months.
In more recent results, sales in the four weeks to 27 March increased by 7% in local currencies, compared with the corresponding period the previous year.
The H&M group plans a net addition of 175 new stores by the end of 2019. Most of the new stores will open in growth markets, but the amount of H&M stores in Europe is expected to reduce by 50.
H&M will be launched on Myntra and Jabong, India’s largest ecommerce marketplaces, later this year.
Karl-Johan Persson, CEO, said: “Our ongoing transformation work has contributed to stronger collections with increased full-price sales, lower markdowns and increased market shares. Sales developed well both in stores and online in many markets, including Sweden, which grew by 11 percent, the UK by 8 percent, Poland by 15 percent, China by 16 percent and India by 42 percent in local currencies.
“During the quarter the company successfully transitioned the online platform in Germany. All markets are now on the new online platform. For our customers in the German market this means improvements such as faster and more flexible deliveries, and better integration between our physical stores and the online store.”