×
327
Fashion Jobs
TOPSHOP TOPMAN
Online Visual Merchandising Manager
Permanent · London
TOPMAN
Buyer (Maternity Cover)
Permanent · London
TK MAXX
20066-Loss Prevention Advisor
Permanent · Hatfield
TK MAXX
Loss Prevention Officer - Bristol
Permanent · Bristol
TK MAXX
Loss Prevention Advisor Northampton Area
Permanent · Northampton
TK MAXX
Loss Prevention Advisor - Hatfield
Permanent · Hatfield
ARCADIA GROUP
Information Security (Infosec) Officer
Permanent · London
SHISEIDO
Accounts Payable Manager
Permanent · LONDON
TK MAXX
Shift Operations Manager
Permanent · Stoke-on-Trent
SANDRO UK
Senior Sales / Supervisor m/f
Permanent · LONDON
TOPSHOP TOPMAN
Senior Digital Visual Merchandising Manager (Maternity Cover)
Permanent · London
BURTON
Senior Buyer - Tailoring - Maternity Cover
Permanent · LONDON
TOPSHOP TOPMAN
Senior Marketing Manager
Permanent · London
TJX CORPORATE
Information Technology Graduate (2021)
Permanent · WATFORD
SHISEIDO
Bareminerals Account Manager - Hoopers, Wilmslow (Maternity Cover) (37.5)
Permanent · Manchester
SHISEIDO
Bareminerals Account Manager - Debenhams, Winchester (Maternity Cover)
Permanent · Hampshire
SHISEIDO
Bareminerals Account Manager - Debenhams, Ipswich (37.5)
Permanent · Ipswich
BURBERRY
Sales Associate - Bicester Village (Full-Time, Temporary)
Fixed-term · BICESTER
BLUE WASH LIMITED
Intellectual Property/Art Paralegal Intern
Internship · LONDON
VICTORIA'S SECRET
Seasonal Associate-Arndale Victoria's Secret Pink
Fixed-term · Manchester
BENSON & CLEGG
Retail & E-Commerce Internship
Internship · LONDON
REISS
Affiliate Assistant
Permanent · LONDON
Advertisements
Published
Oct 1, 2020
Reading time
2 minutes
Share
Download
Download the article
Print
Click here to print
Text size
aA+ aA-

H&M back in profit for Q3 as sales start to recover

Published
Oct 1, 2020

H&M reported its nine-month results on Thursday and, understandably, sales were lower in the period from last December to the end of August, with the company swinging to a loss. 


H&M



But what was most interesting was its information about Q3 in particular when it returned to profit, and what happened in September as sales started to recover post-pandemic in many markets.

In fact, sales in September fell by ‘only’ 5% in local currencies year-on-year. Currently 166 stores, representing 3% of its total are still closed, although a large number of stores still have local restrictions and limited opening hours.

Looking at Q3, the Swedish fashion retail giant said the period from June to August saw net sales falling 16% in local currencies, or dropping to SEK50.87 billion (€4.8bn/£4.4bn/$5.6bn) from SEK62.57 billion on a reported basis. Sales have been falling for much of the year, but 16% was a much a smaller percentage than in Q2 when sales had just about halved.

Obviously, the pandemic still had an effect and sales were never going to be anywhere near normal as the quarter opened with 900 of its 5,000+ stores still being closed. By the end of the quarter, 200 stores still remained shuttered and, as mentioned, this figure has reduced to 166 since then.

The quarter’s gross profit dropped to SEK24.85 billion from SEK31.81 billion in the prior year’s Q3, but at least it was a profit. This corresponds to a gross margin of 48.9%, down from 50.8% last time.

Profit after financial items was SEK 2.36 billion, which beat analysts’ forecasts. Excluding IFRS 16, profit after financial items plunged to SEK2.26 billion from SEK5 billion. 

Looking at the nine-month period, sales were “significantly negatively affected by the Covid-19 situation, particularly in the second quarter when stores were temporarily closed in most markets”. At its worst, around 80% of the firm’s stores were shuttered globally.

Net sales fell to SEK134.48 billion from SEK171 billion a year ago as Q2 included the height of the pandemic.

That meant the company made a loss for the nine months of SEK1.613 billion after financial items and a net loss of SEK1.24 billion. Excluding IFRS 16, the loss was SEK1.847 billion, much worse that the profit of SEK11.98 billion a year earlier.

Given the September and Q3 figures, the firm is clearly on a recovery trajectory even though it’s far from business-as-usual as fashion sales remain challenged globally. 

And in fact, it’s unlikely that there will ever be a return to trading exactly as it did pre-pandemic as so much has changed. 

One point it did make in the earnings report was that its omnichannel model, “which combines strong and profitable online growth with optimisation of the store portfolio, is gradually leading to increased value creation”. 

The “rapid changes in customer behaviour have been accelerated by Covid-19,” it said, so it’s “now stepping up the pace of its transformation work further, with digital investments, optimisation of the store portfolio and increasingly integrated channels”.

Copyright © 2020 FashionNetwork.com All rights reserved.