News on April 3, recently, the Swedish clothing retailer H&M Group disclosed the financial report for the first quarter of the 2022 fiscal year.

It is understood that in the three months ended February 28, 2022, H&M Group's sales increased by 18% to SEK 49.1 billion (approximately RMB 33.324 billion), with a gross profit margin of 49.3%. Operating profit and net profit recorded SEK 458 million and SEK 217 million respectively, which was a significant rebound compared with the losses of SEK 1.128 billion and SEK 1.07 billion in the same period of the previous year.

However, the overall profit level is still lower than analysts expected. Shares of H&M Group fell 11 percent after the earnings report, the biggest drop in two years, wiping $2.4 billion off the company's market value.

According to the report, affected by geopolitical conflicts, H&M Group closed 227 stores in Eastern Europe in March, of which 170 were opened in Russia. Russia is the sixth largest regional market for H&M Group, accounting for about 4% of global sales. Affected by this, the sales growth of H&M Group in March was only 6%.

The Asia-Pacific and Africa market is currently the third largest regional market for H&M Group globally, with revenue falling by 9% in the quarter. The Americas market and Western European market grew significantly, recording sales growth of 26% and 35%, respectively.

According to the financial report, H&M Group only opened two new stores in Arket and H&M Home in the first quarter. As of February 28, the total number of its brand stores was 4,721, a decrease of 228 compared with the same period of the previous year. H&M Group said in its financial report that it plans to open and close 95 and 240 new stores in 2022.

In 2022, H&M plans to expand into more markets. In March this year, H&M opened its first store in Cambodia. In 2022, it plans to expand to Ecuador, Kosovo, North Macedonia, Costa Rica and Guatemala. H&M plans to open its first store in Albania in 2023.

In China, more than 40 stores under the H&M Group have been temporarily closed due to a new round of epidemics. The large H&M flagship store once located on Nanjing West Road in Shanghai has closed after the lease expires in June 2021, and the size of stores in other cities has also shrunk. Monki recently announced that it will withdraw from the Chinese market. The Tmall flagship store has stopped selling goods since April 1, and some offline stores are getting clearance discounts.

In order to respond to market changes, H&M Group intends to increase the number of mid-to-high-end brands such as COS, & Other Stories and Arket in China.

H&M Group pointed out in the financial report that it will invest about 10 billion Swedish kronor to promote the transformation in 2022, and it is expected that the overall revenue will be doubled in 2030. In response to the supply chain problems that have plagued the global apparel industry recently, H&M Group said it will implement a price increase strategy. Price increases have become the consensus of the fast fashion industry. According to a report by market research firm Lectra, Zara and H&M will increase prices by 23% and 13% respectively between August and December 2021.