H&M reinstates divided payments as profits triple on back of global recovery
Swedish retail giant H&M nearly tripled its profit during the past quarter on the back of a “strong recovery” in sales as restrictions eased across the globe.
H&M told shareholders this morning that it had reinstated its dividend for the first time in 18 months as a result.
It reported a pre-tax profit of £520m for the quarter to 31 August against the same period last year, ahead of analyst predictions. The group said it was buoyed by 14 per cent sales growth for the period as footfall improved across its store estate.
“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,” said Helena Helmersson, chief executive officer of H&M.
“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,” she added.
“As restrictions have been eased in many markets store sales have started to pick up again, all while online sales have continued to grow.”
New autumn collections
H&M added that its new autumn collections have been “well received” and that sales in September have been “slightly higher” than for the same month last year.
However, it flagged that demand was not able to be fully met due “disruption and delays in product flow” as it became the latest retailer hampered by global supply issues.
Helmersson 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,” she concluded.