H&M profits climb despite slowdown in September sales

H&M has today reported an 8% increase in net sales for the first nine months of the full financial year to 173.39bn Swedish krona (SEK) (£12.96bn).

Gross profit for the nine months to August 31, 2023, was also up reaching 87.24bn SEK (£6.52bn), while operating profit jumped to 10.2bn SEK (£760m) for the period.

H&M said in its report published today that sales during September are “expected to decrease by 10% in local currencies” compared with the same month last year.

H&M emphasised that its September sales figure was impacted by “unusually hot weather” across its European markets, noting that this had a “substantial negative impact” on sales during the month.

The fashion giant said it is “developing well” in Latin America and confirmed plans to open the doors to its first store in the region as well as trading online in Brazil from 2025. It also plans to “gradually reopen” its stores in Ukraine from November this year.

H&M said it remains focused on customer experience as it will continue to prioritise the membership programme, rolling out its next-day delivery and express delivery in more markets, offering rental options and self-service checkouts in its stores.

H&M chief executive Helena Helmersson said: “During the third quarter the focus has been on profitability and inventory efficiency, resulting in strong cash flow and good profit development. We are taking further steps towards our goals and creating good conditions for profitable growth over time.

“In times of high inflation where household living costs are rising significantly, it is more important than ever to offer customers the best price and unbeatable value for money. Our highest priority remains the customer offering, where work to improve the assortment and the customer experience is making progress, alongside further integration of the two channels.

“We are continuing our investments in areas such as tech, AI and the supply chain, which is enabling improved flexibility, faster response times and greater precision in buying. This leads to customers having access to an even wider and more relevant assortment.

“Our efforts to create conditions for profitable growth towards our long-term goals are taking us in the right direction. The cost and efficiency programme is proceeding at full speed and will continue to have an effect in the coming quarters.

“With a strong customer focus, improved cash flow and increased inventory efficiency our goal of an operating margin of 10% during 2024 remains.”