Net profit tumbled 22 percent in its December 2017 to November 2018 year to 12.65 billion kronor (€1.2 billion, $1.4 billion) although total sales were up five percent to 210.4 billion kronor.

 

Online sales rose 22 percent, the company said.

 

“It was a complicated year for H&M and the sector generally but after a difficult first quarter, there are signs that our efforts to transform the business are beginning to bear fruit,” it said in a statement.

 

Analysts say H&M, which built a major presence on high streets around the world, struggled to get its online strategy in place and so has lagged its peers.

 

In the last three months of its financial year, the company said it had opened three new order centres so as to speed up deliveries to customers.

 

“We have also completed our restructuring in line with the investments made in 2018… all our online sales are now on the same platform,” it added.

 

In recent years H&M has had to cope with a build-up in stock levels — which increased again by 10 percent last year, forcing it into price cutting which hit profitability.

 

H&M, which has nearly 5,000 stores worldwide, said it expects a net increase of 175 this year.

 

The company announced earlier this year that it would open more physical stores so as to counter fierce competition from online sales platforms.