STOCKHOLM, March 30, 2010 (FBC) – H&M ( HMb.ST ), the world’s second-biggest fashion retailer, reported a surprise profit for the December-February period, despite weak demand as consumers cut spending amid high inflation.
The Swedish group’s fiscal first quarter was 725 million Swedish crowns ($69.73 million), compared with a profit of 458 million a year ago, and a loss of 1.10 billion was the average forecast.
The company said strengthening Selpy’s second-hand platform boosted revenue by 1 billion kroner, but warned that H&M’s overall spring sales were delayed by cold weather in many markets.
While H&M has shown signs of getting costs under control, it still struggles to compete with arch-rival Inditex ( ITX.MC ), the owner of Zara and other brands, as well as fast-fashion online retailers such as SHEIN and Temu.
“External factors affecting purchasing costs continue to improve, work on the cost and efficiency program is working at full speed, and many of the changes we have made in recent years are beginning to have an impact,” said CEO Helena Helmerson. In the description.
H&M’s first-quarter earnings, published separately on March 14, were better than feared as a modest increase in sales beat most estimates, analysts said at the time.
As Inditex entices customers to shop in-person after the pandemic, while H&M’s more cost-conscious base feeds inflation into purchasing power, SHEIN and Temu have won success online with items like $10 dresses.
H&M said March net sales are expected to increase 4% in local currencies.
“The spring stocks are well received where the weather is warm,” the company said.
H&M’s share price is up 9.5 percent so far in 2023, less than half of Inditex’s 19.7 percent gain. The Swedish group’s stock closed at 122.86 crowns in Stockholm on Wednesday, just a third of 2015’s all-time high of 368.5 crowns.
($1 = 10.3975 Swedish kroner)
Reported by Marie Manns. Editing by Terje Solsvik and Gerry Doyle
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