Brand Analysis: H&M2018 Annual Revenue Growth Of 5% To $22 Billion 700 Million Is Still The Direction Of The Future

H&M announced its 12 month operating performance as of November 30th. The world's second largest apparel retailer launched a pformation plan last year, investing heavily in logistics and digital technology to improve shopping experience and product lines.

This includes upgrading of its mobile applications and faster delivery.

The company is also developing a new H&M concept store.

In the last three months of its fiscal year, the company spent about $48 million 500 thousand on logistics and technology.

Persson, chief executive of H&M, said that the upgrading of the company's logistics system will inevitably lead to an increase in costs, but will bring a series of improvements to customers.

In the context of rapid changes in the fashion industry, in 2018, we accelerated the pformation to the future, proving that our business has ended the challenging year of H&M group and industry, and we are on the right track, "he said.

Persson said that for H&M and the industry may be a challenging year, but through the difficult first half of the year, there are signs that the pformation of the company has begun to take effect.

H&M's annual revenue increased by 5% to $22 billion 700 million, while net sales increased by 3% in local currency.

Profits fell by 21.8% to 1 billion 360 million dollars over the same period last year.

Online sales rose 22% to 30 billion kronor ($3 billion 200 million), now accounting for 14.5% of the company's total revenue.

We expect this trend to continue with stronger customer services and improved procurement and logistics, "Persson said.

Although this performance is still far below our goal set in early 2018, these positive signals confirm that we have made progress in all strategic areas of focus: creating the best customer service; fast, efficient and flexible product processes; a stable and scalable technology base; and increasing new growth through shop and online expansion.

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H&M opened three new logistics centers in the fourth quarter with a total area of about 230000 square meters, so it can provide faster delivery and wider classification for customers, while reducing the capacity constraints of some markets in 2018.

We also completed the online pformation of investment in 2018, enabling us to successfully launch in Germany in January 2019, and earlier in 2018, difficulties in logistics upgrading in some markets resulted in the fourth quarter cost increase.

H&M said capital expenditure this year will be less than last year, and will continue to shift the balance of investment to digitization.