H&M’s Q4 Sales Fall Short, But CEO Remains Optimistic
Despite missing sales forecasts in the fourth quarter, H&M’s CEO Daniel Ervér remains confident in the company’s ability to achieve long-term, profitable growth. The Swedish fashion giant reported sales of 62.19 billion Swedish krona, below the 63.48 billion forecast, but up 3% in local currencies.
A Challenging Quarter, But Positives Ahead
The company attributed the sales shortfall to the later occurrence of Black Friday, but noted that sales picked up in December and January, marking a positive start to the new fiscal year. Additionally, full-year operating profit came in slightly better than expected, driven primarily by the group’s womenswear, sportswear, and online segments.
CEO Ervér’s Vision for the Future
Looking ahead, Ervér expects pressure on consumers to alleviate further in 2025 and believes the company is well placed to deal with any negative external impacts in international trade. He cited the company’s diversified supply chain and business idea – fashion and quality at the best price in a sustainable way – as key factors in its resilience and growth potential.
A Turnaround in Progress
H&M has been struggling to compete against rivals such as Zara and Shein, but Ervér’s appointment in January 2024 marked a new era for the company. The CEO is targeting long-term sales growth of at least 10% per year, an operating margin above 10%, and a 56% reduction in greenhouse gas emissions by 2030.
A Positive Start to the New Year
Despite the sales miss, H&M’s shares pared losses slightly to trade down 3.25% by 9:18 a.m. London time. Ervér’s optimism and the company’s strong online sales, well-received women’s fashion collections, and effective cost control have positioned H&M for growth in the global fashion market.
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