During the quarter ending August 31, the H&M Group's net sales amounted to SEK 57.2 billion, in line with the previous year. At the same time, operating profit strengthened to SEK 6 billion and the operating margin landed at 10.6 percent. According to the company's CEO, Daniel Ervér, it is primarily the work within purchasing and cost control that has contributed to the improved profitability.
Our work within purchasing, cost control and more efficient working methods has contributed to a more profitable business. Although sales developed in a positive direction during the quarter, we see further potential to increase sales going forward," says Daniel Ervér.
Focus on Digital Infrastructure
To reach that potential, the focus is directed, among other things, towards the company's e-commerce and digital presence. H&M states that online sales account for just over 30 percent of total turnover, a share that has remained at approximately the same level for some time. Now, new strategies are being implemented to accelerate growth and sharpen productivity both online and in physical stores.
Work on the company's digital infrastructure has taken further steps during the latest quarter. The purpose is said to be to create better precision throughout the value chain, from initial product development and purchasing to marketing and final sales. The goal is also to move decisions closer to the customer with the help of a new and simplified organization.
Through a more optimized store portfolio, more upgraded stores and a more personal digital experience, we also enhance the customer experience and productivity in store and online," explains Daniel Ervér.
AI to Increase Relevance
To meet customer needs in a time when many are feeling the effects of high living costs, the fashion group is continuously working to strengthen its customer offering. The report highlights initiatives within supply and increased support from AI as important factors in increasing relevance and precision within e-commerce and other operations.
At the same time, the company noted some logistical challenges during the period. Sales were affected by continued disruptions in the logistics network in Europe and in the global supply chain. The inventory, which amounted to just over SEK 39 billion, was also affected by an increased value of goods in transit as a result of these disruptions. Despite this, the company announces that it is entering the autumn with a good inventory composition and stable conditions to meet demand.