Following today’s release of H&M’s figures for the year ending 30 November 2024; Alice Price, apparel analyst at GlobalData, a leading data and analytics company, offers her view: “H&M delivered a disappointing performance overall in FY2023/24, with sales declining 0.7% to SEK234.5bn, and only rising a muted 1% in local currencies. This is despite it coming under new leadership at the start of the year, with its new CEO’s focus on enhancing its core brand offering through increased trend responsiveness, reduced lead times, and improved relevance through brand activations, yet to yield tangible results. However, the final quarter did show some promising signs of improvement after its decline of 3.4% in Q3, with sales in September up 11% in local currencies, and its reported revenue across the three months just marginally declining 0.7%. The group also cited that its Q4 was inhibited by Black Friday occurring slightly later than in the previous year, with some orders falling into December. This affected the quarter’s sales development by just under 1%, while allowing it to see an uplift of 4% in local currencies from 1 December to 28 January 2025.
“Southern & Eastern Europe continued to outperform, with both regions achieving sales growth of 7% in local currencies, helped by more resilient weather across some of the year. Sales in Western Europe were flat, as consumers remain cautious to spend amid the delicate economic climate, with H&M’s lacklustre proposition failing to convince them to part with their money. The Nordics and North and South America registered the weakest growths, both declining 2%, with consumers in the latter region favouring cheaper alternatives like Shein amid inflationary challenges.
“While H&M previously relied on its portfolio brands to prop up the topline, sales were flat on a reported basis in FY2023/24 and grew 1% in local currencies. Though this is partly due to strong comparatives last year, it also suggests waning appeal as consumers remain discerning of where to shop as their finances remain squeezed. The group is now winding down its outlet store Afound, and integrating Monki into its Weekday stores and website, with sales excluding these companies up 5% in local currencies. Despite efforts to enhance perceptions and strengthen its fashion credentials, the group’s eponymous label continues to flounder, as it struggles to pitch itself against key rivals Mango, Inditex and Shein, which offer superior value for money and style.
“With 30% of sales now deriving online, H&M kept investing in strengthening its omnichannel proposition in 2024, bolstering its physical and digital propositions to provide more seamless and inspiring shopping experiences. Across the period, H&M opened 88 new locations and continued to upgrade existing stores. The fashion giant also plans to open in new markets, opening its first in Brazil in Sao Paolo towards the end of 2025, with expectations of having stores nationwide within three years.”
