H&M Q3 profit up 13 percent
Hennes & Mauritz has posted sales for the third quarter of SEK 16.75 billion (£1.22 billion), a rise of 11 percent. Profit was up 13 percent to SEK 3.76 billion, thanks to cheaper sourcing in Asia and better-than-expected August sales. “The third quarter developed well,” H&M’s head of investor relations, Nils Vinge, said during a conference call. Meanwhile, group sales for the first nine months gained 13 percent to SEK 48.89 million, while profits rose 12 percent to SEK 10.37 billion.
The fast fashion group is performing in line with the market and outperforming analysts’ expectations. Last week Inditex, H&M’s Spanish competitor and owner of the successful Zara chain, reported profit gains for its second quarter, signalling a prosperous retail environment for purveyors of fast fashion. H&M performed strongly in most markets, with the exception of Germany and Austria . Germany also proved to be a tough market for Inditex. H&M does plan to expand further in Germany by opening more stores there and introducing online shopping in Germany and Austria from next fall. The company’s first online store opened in the Netherlands last months and has performed beyond expectations, said Vinge. Sales in the US , where the chain opened nine new stores during the quarter, increased 23 percent.
According to Vinge, sales in August increased 15 percent as the brand’s tracksuits – which were co-designed by Madonna – sold successfully. This is contrary to earlier news reports that the tracksuits were not well-received. He said the “Madonna collaboration was widely regarded”, adding that August like-for-like sales grew 5 percent.
H&M is planning to open approximately 10 shops to house its high fashion brand next spring. Vinge declined to give details but said that the company had signed leases for the first stores in the UK , Germany , Belgium and the Netherlands . He added that the stores would generally encompass 5,000 square feet and would “mix basics with high fashion”. The company is also planning to open 80 new stores worldwide in the fourth quarter. These will mostly be in the US , Canada , the UK and Germany .