At a Glance:
- H&M records pretax profit surging by 64%.
- H&M will double the investments this year.
- The investment area will focus on technology, supply chain, renewable energy and sustainable materials.
H&M has reported a bigger than expected quarterly profit. It has jumped 5% in early trade and plans to double the investments this year to $1.1 billion with an aim to achieve the new target.
The investment area will focus the sending on advanced tech, supply chain, sustainable materials and renewable energy.
Pandemic Affects ease on H&M
The pandemic caused a drastic impact on supply chain operations. This led to disappointing sales for several organizations. But with the situation seeming to normalize, the companies are now positioned for a good financial year and profits.
The CEO of H&M stated, “We ended the year strongly, with sales back at the same level as before the pandemic and with profitability better than it has been for several years.”
With the pandemic effects at ease, the team of H&M will be focusing on growth again backed by their strong financial position and good profitability.
H&M profits reap beyond expectations
The fiscal fourth quarter of company rose by 64% as compared to last year. Refinitiv analysts had forecasted an annual of 5.43 billion crown profits but company made 6 billion crowns.
The profitable quarter has been the result of well-received collections, full-price sales, and good cost control. The recent efforts in making the supply chain more efficient and initiatives in technology also eased the disruption in product supply.
Minimizing carbon footprint
The H&M group has proposed an ordinary dividend of 6.50 crowns/share which will be paid in two instalments. Also, 3 billion crown shares will be dedicated to the buy-back programme.
With the current growth, company aims to double the sales by 2030 and by 2024 reach an operating margin above 10%. It is also aiming to reduce the carbon footprint by half. To fulfil its lower carbon impact, H&M will no longer take supplies that use coal-based fuels.
