H&M profits inch up as pandemic store closures drag on performance

Between December 1, 2020, and August 31, 2021, H&M reported that profits after financial items was SEK8.29bn (£0.70bn), an increase of SEK1.6bn (£0.13bn), while profit after tax was SEK6.38bn (£0.54bn). 

Group revenues in local currencies grew 13% for the period, up to SEK142.1bn (£12.02bn) when converted into Swedish krona. 

H&M said the nine-month period was affected by international coronavirus restrictions, particularly around store closures. The fashion giant said as many as 1,800 of its stores internationally were closed at one time or another during the nine months.

Cash flow from operating activities for the period increased to SEK37.2bn (£3.15bn), while financial net cash increased to SEK24.8bn (£2.10bn). 

Chief executive Helena Helmersson said: “The H&M group’s increase in profit shows that the strong recovery is continuing – despite sales being partly affected by restrictions and delays associated with the pandemic. The results are explained by much-appreciated collections, lower markdowns and good cost control combined with the initiatives implemented in areas such as tech and the supply chain. As restrictions have been eased in many markets store sales have started to pick up again, all while online sales have continued to grow.”

Describing the ongoing effects of the pandemic on H&M’s trading, she added: “The pandemic and its consequences are not yet over and we are humbled by the many challenges in the world around us that affect our business, which call for a high level of flexibility and drive. We have quickly adapted by prioritising cash flow, cost control and flexibility. With our continued transformation and our well-positioned customer offering – to meet customers’ ever-increasing expectations of good value and sustainable fashion – we are optimistic that we will see long-term, profitable and sustainable growth for the H&M group.”