PARIS – Gross sales are nonetheless “flattish” at H&M Group.
The Swedish quick vogue retailer reported gross sales remained largely the identical in native currencies year-over-year within the three months to Aug. 31. The outcomes maintained the pattern additionally reported in Q2, when the corporate blamed gradual gross sales on the moist European spring.
In reported phrases, gross sales elevated by 6 % to 60.89 billion Swedish kronor, or 5.12 billion euros at present alternate. The Swedish forex has seen a 17.5 % slide in opposition to the euro over the previous yr, and reached an all-time low in opposition to the euro in June.
Excluding Russia, Belarus and Ukraine the gross sales improve was 8 % in Swedish kronor, it added. H&M Group totally exited Russia in July, 2022, the place it operated 170 shops, following the nation’s invasion of Ukraine. That transfer had “important adverse affect on our outcomes” and price the corporate upwards of 218 million euros as reported in monetary statements again in January.
The group’s actions in Ukraine stay suspended.
“The work in direction of the corporate’s objective of reaching a ten % working margin in 2024 goes in the proper path. Profitability and stock ranges have been prioritized within the quarter,” the corporate stated in an announcement.
The flat gross sales quantity was beneath analysts expectations, which had ballparked 5 % progress in fixed forex year-over-year.
The group’s give attention to bettering its working margin is seen as constructive by traders, as the corporate has been prioritizing margins over sheer quantity, with costs bumped up and extra full-price promote by means of.
“H&M has change into comparatively costlier this season, pricing it at [around] 10 % beneath common within the UK in comparison with its extra traditional 20 % low cost,” stated RBC analyst Richard Chamberlain in a word following the discharge. The margins ought to proceed to develop as provide chain woes ease, uncooked supplies shrink again from their post-pandemic pricing surge and the corporate hones product combine.
H&M’s flat gross sales as soon as once more places the Swedish quick vogue group, which operates Cos, Monki, Weekday, & Different Tales, Low-cost Monday and Arket alongside its cornerstone H&M model, in distinction to competitor Inditex. The Spanish group, which operates Zara, Pull&Bear, Bershka, Massimo Dutti, Stradivarius and Oysho, reported gross sales progress of 14 % up to now in its Q3 for the interval of August to Sept. 11.
Nevertheless Chamberlain famous the corporate’s enhancements in omnichannel, which has additionally been a significant focus at Inditex, “ought to lead it to holding its personal in main markets.”
The corporate can have a fuller image of actions in Q3 when it releases its full 9 month report on Sept. 27.
