A view shows an H&M warehouse in Magna Park in Milton Keynes, Britain September 26, 2021. REUTERS/Andrew Boyers/File Photo

STOCKHOLM, Jan 28 (Reuters) – Swedish fashion group H&M (HMb.ST) drew a line under the pandemic on Friday, reporting a bigger-than-expected jump in quarterly profit and increasing investment in a bid to double its sales by 2030.

Shares of the world’s second-largest clothing retailer jumped 5% at the start of trading after announcing it would double its investments in 2022 to around 10 billion Swedish kronor ($1.1 billion) to help achieve their new goal.

Spending will focus on areas such as technology, supply chain, renewable energy and sustainable materials, he said.

“We ended the year strong, with sales at the same level as before the pandemic and profitability better than it has been for several years,” said CEO Helena Helmersson.

“Now that we have returned to a more normalized situation with a solid financial position and good profitability, we can once again fully focus on growth.”

Pre-tax profit in September-November – H&M’s fourth fiscal quarter – jumped 64% from a year earlier to 6.00 billion crowns ($640 million). Analysts polled by Refinitiv had on average expected a profit of 5.43 billion crowns.

“The strong result for the quarter is mainly the result of well-received collections with more full-price sales, lower price cuts and good cost control,” H&M said in a statement.

It said initiatives in recent years in technology and to make its supply chain more efficient have mitigated the effects of product supply disruptions.

Compared to the pre-pandemic fourth quarter of 2019, profit increased by 43%.

H&M, like its biggest rival Inditex, the owner of Zara, is recovering from the pandemic despite supply chain challenges. Read more

The Swedish group has proposed an ordinary dividend of 6.50 crowns per share to be paid in two installments, as well as a share buyback program of 3 billion crowns.

H&M said it now aims to double its sales by 2030 compared to 2021 sales while halving its carbon footprint and achieving an operating margin above 10% by 2024.

In 2021, sales totaled 199 billion crowns and the operating margin was 7.7%. Profit before tax totaled 14.3 billion crowns, against an average analyst forecast of 13.5 billion.

To help reduce its carbon impact, H&M said it would no longer take supplies using coal-based fuels.

($1 = 9.4194 Swedish kronor)

Reporting by Anna Ringstrom Editing by Simon Johnson and Mark Potter

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