Swedish retail giant H&M said like-for-like sales fell 5% in its full year to November 30 but reported a strong start to 2010.
During the full year, H&M said total sales excluding VAT rose 15% to 101.39bn kronor (£8.57bn), a 4% rise in local currencies. On a like-for-like basis sales dropped 5%.
Full-year group profit after tax was 16.38bn kronor (£1.39bn). The retailer said mild autumn temperatures left it with overstocks of outerwear going in to the new year.
In the fourth quarter ending November 30, sales excluding VAT were up 6% to 28.01bn kronor (£2.37bn), a 3% rise in local currencies. On a like-for-like basis sales fell 6%.Group profit after tax was 6.15bn kronor (£0.52bn).
Gross margin rose to 66.3% in the fourth quarter from 62.4% in the same quarter a year earlier. However, H&M warned “weak” sales at its year-end left it with high stock levels, resulting in larger markdowns during the first quarter of the 2009/2010 year and “thereby affecting the gross margin negatively compared to the corresponding quarter last year”.
H&M said sales in December were up 15% in local currencies, a 3% like-for-like rise. Sales from January 1 to 26 continued to be strong, up 13% in local currencies compared to the same period last year.
In the full year, H&M debuted in Russia and opened 275 shops and closed 25. For the next financial year, it plans to open around 240 shops.
H&M’s store numbers totalled 1,988 on December 31 compared to 1,738 at the same time last year.