H&M shares are trading in the red Wednesday, as the Swedish-based retailer gives shareholders more key details about profits and expectations. At its first ever Capital Markets Day, H&M executives will spend the day sharing the fashion retailer’s strategy to compete with its rivals.
By 1035 BST, H&M shares were 2.87% lower at SEK137.50. The H&M stock price has been on a general downward trend since 2015.
H&M facing tough 2018
H&M is hosting the Capital Markets event in the wake of disappointing fourth quarter results, published at the end of January.
In a press release ahead of Wednesday’s event, H&M shared some details of what it was facing and what it would discuss.
Previously unreported details included news that in the 2016/17 financial year, online H&M sales totalled SEK29 million, or some 12.5% of total sales during the period. The fashion retailer also said that its online sales made up 22% of the group’s operating profit.
Looking to 2018, H&M said it expects the environment it’s operating in to remain difficult.
“In view of the ongoing shift in the industry and the H&M group’s ongoing transition work, 2018 is expected to remain challenging,” the group said in its press release. “H&M’s sales in comparable stores are expected to remain negative with a gradual improvement during the year.”
However, H&M also stated that there are expected to be some good opportunities for the retailer during the year, which should result in a better performance compared with the previous year. And, it anticipates online sales growth of ‘at least’ 25%.
H&M developing two new business models
Sharing more details on its current growth strategy, H&M said it expects online group sales to grow by around 20% per year between 2019-22. It also stated plans to unveil two new businesses during that period.
“There are great opportunities for further additional sales from two separate and completely new business models that the company is currently developing,” H&M said.