H&M Group reported slow sales for the third quarter, with operating profit reaching SEK 3.5bn (£250m).
- Net sales were SEK 59bn (£4.35bn) between 1 June and 31 August 2024, compared to SEK 60.9bn (£4.5bn) in the same period of 2023.
- The company faced challenges due to cold weather in June, impacting key European markets.
- The autumn collection was well received, with anticipated sales growth in September 2024.
- New store openings and digital advancements aim to boost sales in upcoming seasons.
H&M Group, the Swedish fashion giant, experienced a slowdown in sales during the third quarter, as the company reported an operating profit of SEK 3.5bn (£250m). The net sales amounted to SEK 59bn (£4.35bn) for the period from 1 June to 31 August 2024, showing a decline compared to SEK 60.9bn (£4.5bn) in the corresponding quarter of the previous year. In local currencies, net sales were essentially flat year-on-year, a point of concern for stakeholders seeking continuous growth.
Several external factors affected H&M Group’s performance. The third quarter commenced with unfavourable cold weather conditions across significant European markets, which dampened consumer spending in June. CEO Daniel Ervér remarked on the challenging start but noted an improvement by the end of the quarter, with sales levels matching those from the previous year in local currency terms. The firm’s resilience in maintaining stable sales despite adverse initial conditions speaks to effective cost control measures and strategic brand investments.
Despite the slow start, H&M Group’s autumn collection gained positive traction among consumers, and the company anticipates an 11% increase in sales for September 2024 compared to the same month last year. This optimistic outlook is bolstered by the opening of new physical stores and enhancements in their digital presence. Significant developments included unveiling their first H&M Beauty flagship store in Sweden and expanding digital storefronts on China’s e-commerce platforms Douyin and Pinduoduo.
Looking ahead, H&M plans to inaugurate its first store in Brazil, set to open in São Paulo by the end of 2025. Nevertheless, the company is cognizant of ongoing challenges such as the cost of living pressures that have affected revenue and purchasing costs. The group forecasts an operating margin below 10% for this fiscal year, underscoring the exigency for adaptive strategies going forward. Ervér highlighted the brand’s investments in products, customer experience, and marketing as pivotal efforts for enhancing future sales and profitability.
H&M Group navigates a challenging third quarter with strategic initiatives aimed at fostering growth and stabilising profits amidst external pressures.
