Dow Jones Newswires: Hennes & Mauritz swings to loss as higher costs, loss of Russian business weighs
STOCKHOLM–Sweden’s Hennes & Mauritz AB on Friday swung to a net loss in its fiscal fourth-quarter as earnings were weighed by higher costs and the loss of its profitable Russia business.
The fashion retailer posted a net loss of 864 million Swedish kronor ($84.1 million) for the quarter ended Nov. 30, compared with a profit of SEK4.62 billion a year earlier. Analysts polled by FactSet had expected a profit of SEK2.66 billion.
Sales rose 9.9% to SEK62.43 billion in the quarter, and H&M said sales increased by 5% in local currencies in the period from Dec. 1 to Jan. 25.
H&M’s wind-down of its Russian business had a significant negative impact on results, while raw materials, freight and energy costs, restructuring charges and a strong U.S. dollar resulted in extensive cost increases. Combined, these factors came to a fourth-quarter hit of SEK5 billion, it said.
However, it sales in the new financial year have started well and while external factors are moving in the right direction, H&M said.
“There are very good prerequisites for 2023 to be a year of increased sales, and improved profitability. Thus, our goal of achieving a double-digit operating margin for full-year 2024 remains in place,” Chief Executive Helena Helmersson said.
H&M declared an unchanged dividend of SEK6.50.
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