4Q18 Sales Update

In the fourth quarter ended November 30, Swedish fashion company H&M grew sales including VAT by 11.9% in reporting currency to SEK 65.5 billion. At constant currency, sales growth including VAT was 6.0%, which was below analyst expectations of 7.0% growth, according to StreetAccount. This was a faster growth rate than 3Q18’s 4.0% rate at constant currency. H&M grew sales excluding VAT by 12.0% in reporting currency to SEK 56.4 billion, in line with the consensus estimate per StreetAccount.

FY18 Sales Update

In FY18, H&M reported sales growth including VAT 5.4%, and 3.0% at constant currency, to SEK 244.3 billion. The company reported sales growth excluding VAT of 5.2%, or SEK 210.4 billion. In November, H&M announced it will close its Cheap Monday brand. The company stated that Cheap Monday’s “traditional wholesale business model…has faced major challenges due to the shift in the industry,” and that its sales and profits have been on the decline “for a long time.” H&M did not provide information on store numbers for this quarter unlike in previous trading update releases. In the second quarter, H&M reported 6.7% growth in total store numbers, to 4,801 stores. H&M announced that it will report only sales excluding VAT in future interim reports and sales development press releases, effective from its full-year report to be published January 31, 2019. The company noted that the above sales figures are provisional and may deviate slightly from the full-year report.