The world's second biggest fashion retailer's fiscal fourth quarter was 821 million crowns $79.7 million against 6.26 billion a year ago and a mean forecast of 3.67 billion in a Refinitiv poll of analysts.
H&M, which had already reported that sales in the quarter were flat, said on Friday that sales from December 1 -- Jan. 25 -- the start of its fiscal first quarter were up 5 per cent in local currencies.
The lower profit in the fourth quarter compared with the same quarter in the previous year is mainly caused by negative external factors, loss of the operating profit previously contributed by Russia and the one-time cost of the cost and efficiency programme.
The cost of reorganizing Russia, higher raw material, freight and energy costs, currency translation effects and the currency translation effects totalled around 5 billion crowns, Chief Executive Helena Helmersson said.
She said that instead of passing on the full cost to customers, we chose to strengthen our market position.
H&M in September launched a plan to cut costs by 2 billion crowns annually, with savings from layoffs and other measures expected to start in the second half of 2023.
In November, the group flagged it would cut around 1,500 jobs and book a roughly 800 million crown restructuring charge in the fourth quarter.
It announced last year that it was leaving Russia due to Ukraine's invasion.
Analysts at Credit Suisse said the gross margins were less than expected.
The company said that sales so far in the current quarter were strong, as expected given colder December weather across Europe, so the company has decided not to pass on the full increase in input costs.
H&M has struggled to keep pace with the biggest rival, Inditex, owner of Zara.
In December, Inditex posted a jump in profit for the nine months through October but said sales growth slowed in the final three months of the period due to the weak consumer environment.
Britain's Superdry has cut its profit forecast for the year due to the fact that it's wholesale business is underperformed.
H&M proposed a dividend for 2022 of 6.50 crowns per share, unchanged from the year before, about matching expectations.