H&M is optimistic after significant profit boost

H&M Group is optimistic about the future after a solid recovery in the past nine months: sales grew by 14 per cent, but it is above all the net profit that has recovered from the coronavirus and has increased sevenfold.

Fewer discounts, more sales

In the past third quarter, sales at H&M Group increased by 14 per cent compared to the same period last year. Even though there were still obstacles, the new autumn collections were well received, says CEO Helena Helmersson. For example, around 100 stores were still closed due to Covid restrictions, and there were disruptions and delays in the supply chain. Nevertheless, sales in September were slightly higher than last year, and online sales increased by 22 per cent in local currencies.
 

Over the past nine months, sales were up 13 per cent, amounting to 142.1 billion Swedish kronor (13.9 billion euros). However, the pandemic meant that there was still a lower footfall in the stores. Around 1,800 stores were closed for a certain time during the period.
 

At the same time, profit after tax rose by 158 per cent to 6.3 billion Swedish kronor (617.6 million euros). Helmersson says this was due to more full-price sales, lower markdowns and good cost control. “With our continued transformation and well-positioned customer offering, we are optimistic that we will see long-term, profitable and sustainable growth for the H&M group”, the chief executive anticipates.

Five new countries

H&M is expanding again: in autumn 2021, the group will go online in Chile and during the first half of 2022 in Peru, Colombia and Uruguay. In 2022, the fashion giant will be physically entering five new markets: Ecuador, North Macedonia and Kosovo, and through franchises in Costa Rica and Cambodia.
 

Still, the group realises that the pandemic and its consequences are not over yet. “The many challenges in the world around us call for a high level of flexibility and drive”, they say.
 

H&M also aspires to lead the entire fashion industry into a circular and renewable future. Helmersson, therefore, wants to continue investing in technology, materials and sustainable initiatives.