(RTTNews) - Swedish retailer Hennes & Mauritz AB or H&M Group (HNNMY.PK, HMRZF.PK, HEN.L) reported Friday that its first-quarter profit after tax more than doubled to 1.92 billion Swedish kronor from last year's 803 million kronor. Earnings per share were 1.16 kronor, up from 0.49 krona per share.
Excluding the effects of IFRS 16, profit after tax were 1.86 billion kronor in the latest quarter.
Gross profit increased 10 percent to 28.03 billion kronor, corresponding to a gross margin of 51.0 percent, up from 50 percent last year.
The H&M group's net sales increased 8 percent to 54.95 billion kronor from 51.02 billion kronor last year. In local currencies, net sales increased by 5 percent.
In the second half of the quarter, sales were muted by the rapid outbreak of coronavirus, particularly in China where sales decreased 84 percent in February.
Excluding China, Hong Kong, Singapore, Macau, Japan and Taiwan, sales increased by 7 percent in local currencies.
Online sales increased 48 percent in Swedish kronor and 44 percent in local currencies.
Meanwhile, as of March 31, a total of 3,778 out of 5,065 stores were closed. Net sales in March 2020 decreased 46 percent in local currencies. Online sales in March 2020 increased by 17 percent in local currencies. Digital sales channels remain open in 47 of the group's 51 online markets.
The company have taken various measures to mitigate the impact of the coronavirus. The board already said it is proposing to the 2020 AGM that the dividend is canceled.
The company is also reviewing the need for any redundancies. Senior executives have taken a temporary 20 percent pay cut.
Looking ahead, the company said the second quarter will naturally be very negatively impacted by the corona situation and will therefore be loss-making.
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