H&M Group revealed weaker than expected sales for Q4 (the period to the end of November) on Thursday, but sales improved in December and January with the new financial year off to a better start.
Its quarterly sales were SEK62.19 billion (€5.42bn/£4.54bn/$5.65bn), which was 3% higher in local currencies but was lower than analysts had predicted. Yet sales rose 4% in the next two months.
Gross profit for Q4 increased to SEK33.942 billion from SEK33.657 billion with the gross margin up to 54.6% from 53.7%.
Operating profit increased to SEK4.624 billion from SEK4.332 billion, for an operating margin of 7.4%, up from 6.9%. The operating profit figure was affected by wind-down costs of around SEK200 million relating to stores belonging to Monki and other one-offs.
But the profit figure after tax nearly doubled to SEK3.081 billion from SEK1.569 billion.
For the full year to the end of November, the company saw net sales falling to SEK234.478 billion from SEK 236.035 billion. In local currencies, net sales increased by 1%.
Gross profit increased by 4% to SEK125.299 billion for a gross margin of 53.4%, up from 51.2%, while operating profit increased to SEK17.306 billion, up 28% excluding the result from investments in associated companies and joint ventures. Net profit rose 33% to SEK11.584 billion.
CEO Daniel Ervér was upbeat about the results, saying that “after one year as CEO, I’m confident that we are on the right track. We have set a clear direction focusing fully on our core business: improving what makes the biggest difference for the customer and removing what doesn’t. While there is a lot left to do, we have a strong plan to drive the long-term growth we are aiming for.”
He said the Autumn collection — which launched with a series of events in fashion capitals such as Milan, London and New York, bringing music, culture and fashion together — “was very well received”. Gross margin and operating profit also grew, despite wind-down costs and increased investments in the customer offering, marketing and store optimisation.
Strong online sales together with “improved product presentation and a more inspiring shopping experience, well received womenswear collections and effective cost control all contributed to a positive development in the quarter”.
He added that “during 2024, we made significant improvements. Our priority was the H&M product offering, with an initial focus on womenswear, where we increased our trend responsiveness and overall assortment relevance. In the fourth quarter, full-price selling of womenswear increased in all channels”.
The company also “accelerated the pace of improvements to our supply chain, increasing flexibility and product availability across channels. For example, we continue to deepen partnerships with our suppliers, shorten our product development process starting with womenswear, improve our demand forecasting, further develop our near-shoring capacity, and expand the use of RFID”.
During the year the group opened 88 new stores and continued to optimise its store portfolio. With more than 4,200 stores, “upgrading our store portfolio will remain a priority for us,” the CEO said.
And the company will open its first H&M store in Brazil, in São Paulo, towards the end of this year.
Amazon.com is increasing its advertising on billionaire Elon Musk’s social media platform X, the Wall Street Journal reported on Thursday, citing people familiar with the matter.
Reuters
The major shift comes after the e-commerce giant withdrew much of its advertising from the platform more than a year ago due to concerns over hate speech.
In 2023, Apple also pulled all of its advertising from X and has recently been in discussions about testing ads on the platform, the report said.
Several ad agencies, tech and media companies had also suspended advertising on X following Musk’s endorsement of an antisemitic post that falsely accused members of the Jewish community of inciting hatred against white people.
Monthly U.S. ad revenue at social media platform X has declined by at least 55% year-over-year each month since Musk bought the company, formerly known as Twitter, in October 2022. He had acknowledged that an extended boycott by advertisers could bankrupt X.
Musk has become one of the most influential figures following President Donald Trump‘s re-election. He now leads the Department of Government Efficiency, which aims to cut $2 trillion in government spending.
Italian luxury goods group Salvatore Ferragamo said on Thursday its revenue dropped by 4% at constant currencies in the fourth quarter, flagging “encouraging results” from its direct-to-consumer sales which were overall flat in the last three months of the year.
Sales in the North American region, which accounted for 29% of total revenue, were up 6.3% in the quarter. However, the Asia Pacific area saw a 25% drop in revenue at constant exchange rates.
The slowdown in global demand for luxury goods, especially in China, has made the group’s turnaround harder. Overall preliminary revenues reached 1.03 billion euros in 2024, in line with analysts’ estimates, according to an LSEG consensus.
“January shows an acceleration in our DTC channel’s growth, albeit supported by the different timing of the Chinese New Year and a favourable comparison base versus last year”, Chief Executive Marco Gobbetti said in a statement.
Spanish fashion and fragrance company Puig reported a 14.3% rise in fourth-quarter sales on Thursday, beating analyst expectations for the key holiday period.
Charlotte Tilbury
The Barcelona-based company behind perfume brands Rabanne, Carolina Herrera and Jean Paul Gaultier said net sales for the three months to Dec. 31 were 1.36 billion euros ($1.42 billion), above the 1.30 billion euro average forecast from analysts polled by LSEG.
Puig, which generates most of its revenue from fragrance sales, is heavily reliant on the holiday season, with analysts estimating that nearly half of its prestige perfumes are sold in the quarter that includes Black Friday and Christmas.
The company, which also owns luxury skincare and make-up brands Byredo and Charlotte Tilbury, said full-year sales reached 4.79 billion euros ($4.99 billion), up 11% from 2023, surpassing its goal of increasing sales faster than the 6-7% forecast for the global premium beauty market.
The average of analyst estimates was for sales of 4.72 billion euros in 2024, given that it is less exposed to sluggish demand in China and that more than half of Puig’s revenue comes from Europe, the Middle East and Africa while 18% comes from the United States.
The 2024 performance of larger rivals such as Estee Lauder and L’Oreal was hampered by muted demand from China, where a property crisis and high youth unemployment have curbed consumer spending.
Puig said sales in its core fragrance and fashion business grew by 21% in the holiday quarter.
Sales in the make-up division fell 7.2%, with its Charlotte Tilbury brand affected by a voluntary withdrawal of select batches of Airbrush Flawless Setting Spray in December over what Puig described as “an isolated quality issue in a limited number of batches” detected during routine product testing.
Entertainment8 years ago