H&M disappoints with turnover and profit

H&M Group‘s turnover and profit remained below expectations, as the retailer claims the impact of external factors was greater than expected. However, a well-received autumn collection and the collaboration with Charli XCX offer some hope.

Margin shrinks by tenth

The group behind brands such as H&M, Cos, Weekday, & Other Stores and Arket realised 59 billion Swedish crowns (5.2 billion euros) in sales during the third quarter of its financial year, which is slightly lower than a year earlier. Profits were also below expectations, at 3.5 billion crowns.

CEO Daniel Ervér pointed to external factors that he claims had a bigger than expected impact on turnover and procurement costs: he singled out the bad weather and higher marketing costs. As a result, the company’s operating margin will be about 10 % lower this year.

However, the CEO is hopeful about the future as sales picked up during the summer, and September was even “excellent”. Ervér says the autumn collection is well-received by customers and is getting a lot of resonance on social media. The fashion company is expecting a lot from the new campaign, with Charli XCX as the figurehead. H&M plans to open more Beauty flagship stores, a launch in Brazil by the end of this year and the opening of digital shops on Chinese marketplaces Douyin and Pinduoduo this autumn.