Hennes & Mauritz (HM) Q4 2024 earnings summary

Executive summary

• Focused on strengthening the core brand, prioritizing organic growth, profitability, and women's wear as a key driver of recent success.

• Achieved strong customer engagement through elevated product offerings, improved shopping experiences, and enhanced brand marketing, especially via digital channels and influencer collaborations.

• Continued investment in sustainability, with a 23% reduction in Scope 3 emissions since 2019 and recognition in major sustainability indices.

• Strong profitability development, with cost control and digital expansion highlighted as key drivers.

Financial highlights

• Q4 net sales were SEK 62,193m, up 3% in local currencies; full-year net sales SEK 234,478m, up 1% in local currencies.

• Q4 gross profit increased to SEK 33,942m (gross margin 54.6%); full-year gross profit SEK 125,299m (gross margin 53.4%).

• Q4 operating profit was SEK 4,624m (margin 7.4%); full-year operating profit SEK 17,306m (margin 7.4%), up 19% year-over-year.

• Earnings per share nearly doubled in Q4; full-year EPS was SEK 7.21 (up from SEK 5.37).

• Online sales accounted for 30% of total sales in 2024.

Outlook and guidance

• Targeting long-term annual sales growth of at least 10% and profit margins above 10%.

• Continued focus on organic growth, with expansion in both digital and physical channels and non-organic expansion deprioritized.

• Marketing investments to remain high in early 2025, with a relative increase in the first half of the year.

• Expecting a slight increase in markdowns in Q1 2025 due to Black Friday timing and ongoing external pressures.

• Store portfolio changes in 2025 expected to have a neutral or slightly positive impact on sales.