H&M reports weakest profit growth since 2003

Hennes & Mauritz (H&M) has reported its weakest profit growth since 2003. The retailer is blaming spiralling production and transportation costs for the dip.

H&M reports weakest profit growth since 2003

The Sweden-based clothes retailer, the second largest in Europe, made a third-quarter pre-tax profit of £380m. This figure is up from £360m for the same period last year but fell short of expectations.

Sales for the period totalled £1.7bn and the company gross margin fell by 0.4 percentage points from a year ago to 60.8%.

H&M says the fall in its gross margin is due to steeper price cuts compared with last year. The company adds it was hit by inflation in its production countries and higher transportation costs.

The retailer says it intends to continue expanding despite the gloomy market conditions and is aiming to open 114 new stores by the end of the year.

H&M opened its first store in Japan last month and is planning to open further outlets in Tokyo later this year and in 2009.

Latest from Marketing Week


Access Marketing Week’s wealth of insight, analysis and opinion that will help you do your job better.

Register and receive the best content from the only UK title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work. The more we know about our visitors, the better and more relevant content we can provide for them. And, yes, knowing our audience better helps us find commercial partners too. Don't worry, we won't share your information with other parties, unless you give us permission to do so.

Register now


Our award winning editorial team (PPA Digital Brand of the Year) ask the big questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.


From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we are your guide.


Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Having problems?

Contact us on +44 (0)20 7292 3703 or email customerservices@marketingweek.com

If you are looking for our Jobs site, please click here