H&M is still growing, but for how long?

Swedish fashion giant H&M has seen growth for the fifth consecutive quarter, as turnover rose by 11 %. Still, there is much work left to be done, as the chain readily admits.

6 % without currency effects

In the second quarter (from March until the end of May), the group’s turnover rose to 57.5 billion Swedish crowns (about 5.4 billion euros). Excluding exchange rate effects, the sales figure only increased by 6 %. That means the Swedish chain has seen growth for five quarters in a row.

The fashion industry keeps changing at a high pace, the group says, and now that both sales and customer satisfaction are on the rise, H&M wants to focus even more on transformation. The chain has chosen to take that route because it has been struggling with overstock and severely lowered prices, but all of that is going in the right direction, the chain believes. Still, CEO Karl-Johan Persson admits there is a lot of work ahead and there are many challenges to face.

Analysts expect deceleration

The Swedish fashion chain will only release full quarterly figures at the end of June. Analysts worry that the turnover numbers that have been revealed only cover part of the story: turnover growth may have slowed down in April and May, reports Bloomberg. According to this analysis, while March brought 7 % growth, April and May brought only 5.5 %. It may be possible that stock has increased again (although H&M has been trying to limit them for years), leading to stagnating profit figures.

Although H&M has not responded to these estimations and the officially announced turnover is higher than expected, the analysis did slightly affect the share on the stock market. Other fashion retailers have had a difficult quarter as well, although H&M’s rival Inditex surprised everyone with a robust performance this past spring.