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Hennes & Mauritz (OTCPK:HNNMY) reported sales increased by 3.4% in Q2 to SEK 59.6 billion. Gross profit was up 11% to SEK 33.6 billion, which was 56.3% of sales. Operating profit of SEK 7.1 billion for the quarter missed the consensus expectation of SEK 7.3 billion. The Stockholm-based company also pointed to a significant improvement in cash flow from operating activities, which increased to SEK 12.6 billion.
The retailer said its spring and summer collections were very well received, which is reflected in the improved sales in the second quarter. During the spring, the company noted that it successfully tested an updated online store that it is launching in larger markets during the autumn.
CEO update: “We achieved our best results for many years in the second quarter, showing once more the H&M group’s strength and robust financial position, with strong cash flow as well as improved profitability and sales. We are now raising our ambitions further to strengthen the brand, the customer offering and the shopping experience. With a focus on our customers, committed colleagues and a faster pace of investment in the second half of the year, we see good conditions for continued profitable, long-term and sustainable growth.”
Looking ahead, H&M (OTCPK:HNNMY) said unstable weather during June has impacted sales and warned on high materials costs. However, H&M (OTCPK:HNNMY) said a goal for an operating margin of 10% for full-year 2024 remains in place.
Shares of Hennes & Mauritz (OTCPK:HNNMY) fell 12.15% in afternoon trading in Zurich.
