Hennes & Mauritz AB said on Wednesday that this year will be challenging as it continues to build its online presence. Nevertheless, as sales from both the internet and new stores grow, it expects improved results in 2018.
“In view of the ongoing shift in the industry and the H&M group’s ongoing transition work, 2018 is expected to remain challenging. H&M’s sales in comparable stores are expected to remain negative with a gradual improvement during the year,” H&M said in a statement.
“A tough start with high opening stock levels from Q4 2017 and imbalances in the product range are resulting in high markdown costs, with a negative effect on earnings at the start of the year,” it added.
According to the statement, “The H&M group’s online sales are expected to increase by at least 25 percent and New Business sales are expected to increase by at least 25 percent. Sales in newly opened stores, net, are expected to add approximately 4 percent to group sales in 2018.”
Overall, it is assessed that there are good opportunities for a somewhat better result for the full year compared with the previous year.
The group, which is controlled by the Persson family, is holding its first-ever capital markets day on Wednesday in a bid to assuage investors calling for more detail on performance and strategy.