The Full Price Sales Of H & M Transformation Have Been Increasing, And The Discount Promotion Has Been Reduced

June 26, Swedish fast fashion giant H&M In the first half of fiscal year 2019, the Swedish group reported a good performance in the first half of the year with a year-on-year growth of 10.84 billion kronor in the first half of the 2019 fiscal year, and the group is making efforts to report a good performance in the first half of the year.

H & M shares rose 13.7% to SEK 165 at the end of June 27, up 13.7% from the previous day.

Karl Johan Persson, the group's chief executive, said: "the increasing full price sales, the reduction in discount promotions and the increase in market share show that the improvements we have made in terms of product mix and customer experience have gained recognition from consumers. By continuously integrating physical and digital channels, we can provide customers with a more convenient and exciting shopping experience. Of course, these and other large-scale investments will increase costs and reduce profits in the short term, but they will benefit the company in the long run. At present, the transformation is taking effect, and we will continue to further promote the transformation work around the strategic focus. "

For the six months ended 31 May 2019, the core financial data of H & M group are as follows:

Net sales increased 11% year-on-year to SEK 108.489 billion, up 5% in local currency terms

Excluding other items, the profit was SEK 6977 million and the profit after tax was SEK 5372 million, equivalent to SEK 3.25 per share

For the three months ended 31 May 2019, the core financial data of H & M group are as follows:

Sales increased 11% year-on-year to SEK 57.47 billion, up 6% in local currency terms

Gross profit was SEK 31.825 billion with a gross margin of 55.4%

Excluding other items, the profit was SEK 5.934 billion, which was SEK 4.569 billion, equivalent to SEK 2.76 per share

In terms of regions, most markets of H & M group performed well in the second quarter. Sales in the US market increased by 17% in local currency, 25% in Mexico, 39% in India, 19% and 11% in Russia and Poland. Although the Nordic M & M group had a severe market share in Europe in the second quarter, it also had a certain market share in the UK.

In addition, the group's financial report also revealed that its summer series sales had a good start, and the group's sales in June were forecast to increase by 12% in local currency compared with the same period last year. Karl Johan Persson, the group's chief executive, said the growth was partly due to warmer weather in northern Europe, where unusually cold weather in the second quarter dampened consumer demand for the summer range, but the market performed particularly well in June as temperatures rose.

Compared with the same period of last year, the discount proportion of H & M sales decreased by 1% compared with the same period of last year. Based on a good start to June, H & M group estimates that this proportion will continue to fall by 1.5 percentage points in the third quarter of fiscal year 2019, thus achieving the fourth consecutive quarter reduction.

At the end of the second quarter (31 May), the group's inventory level increased by 11% to sek40.4 billion, or 18.3% of sales, slightly improved from 18.6% at the end of the first quarter.

In order to adapt to the changing shopping patterns of consumers, H & M group has reduced the number of planned stores from 175 to about 130 (the group has 4979 stores in the world as of May 31) and increased its digital investment. On the one hand, H & M group will try advanced data analysis and artificial intelligence (AI) technology in the future; on the other hand, the group will also implement digital expansion in new markets:

In April, the official H & M mall was launched in Mexico, and this autumn, the brand online mall will also land in Thailand, Indonesia and Egypt through franchising

This autumn, H & M brand will also land in myntra, India's largest e-commerce platform

Story & other's high-end e-commerce group will be launched in China

In a conference call with analysts, Karl Johan Persson noted that online sales increased by 27% year-on-year in the second quarter and 20% in local currency terms. In addition, the group will invest heavily in technology, supply chain capabilities and upgrading of existing stores and online shopping malls.

Jyrki tervonen, the group's chief financial officer, said it would continue to maintain its annual sales forecast of SEK 10.5-11 billion.

Although RBC's (RBC) and RBC's market value will continue to rise in a timely manner, we believe that RBC's market value (RBC) and RBC will be able to reverse the situation in a timely manner

(1 SEK (about RMB 0.7) Author: Wei Fang