Swedish clothing retailer H&M has reported a 7% rise in gross profit, reaching Skr27.65bn ($2.60bn) in the first quarter of fiscal 2024 (Q1 2024), up from Skr25.88bn in Q1 2023.  

The improvement reflects a gross margin of 51.5%, a significant increase from 47.2% in the same period of the previous year.

During the quarter ending 29 February 2024, H&M delivered Skr53.69bn in sales, down by 2% from Skr54.87bn in Q1 FY23. 

The retailer’s online sales continue to represent a significant portion of the business, accounting for 30% of its total.

Net sales of the company’s portfolio brands also grew by 8% over the quarter. 

H&M’s operating profit saw a substantial boost, surging 186% to Skr2.07bn in Q1 FY24, compared with Skr725m in Q1 FY23. 

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This growth translates to an operating margin of 3.9%. 

The company’s liquidity remains robust, with cash and cash equivalents totalling Skr20.82bn as of 29 February 2024.  

This figure is slightly down from Skr21.29bn at the same point in the previous year.  

H&M’s store count has seen a reduction of 2%, with 4,338 stores compared to 4,414 in the previous year.

The current financial year has seen the opening of 16 new stores and the closure of 47. 272 of the group’s stores are operated by franchise partners. 

H&M CEO Daniel Ervér said: “Development continued in the right direction in the first quarter with an improved gross margin and operating profit, lower inventory and strong cash flow.  

“We continue to plan our business with respect for a challenging situation in the world around us where consumers remain affected by inflation and high interest rates. In this situation, our customer offering is more relevant than ever. Our top priority is to strengthen sales, and our target of a 10 percent operating margin for full-year 2024 thus remains in place.” 

For 2024, the brand plans to open 100 new stores and close 160. 

In March 2024 H&M announced plans to close stores and cut 588 jobs in Spain.