STOCKHOM – Sales at fast fashion retailer H&M fell by 16 per cent in the third quarter compared to the corresponding period last year. The period, which covers 1 June 2020 to 31 August 2020, reflects the impact of the coronavirus pandemic which meant that at the beginning of the quarter approximately 900 of the group’s more than 5,000 stores were temporarily closed. At the end of the quarter just over 200 stores were temporarily closed.
The company, however, claims that its recovery is going “better than expected,” and claims this is as a result of “appreciated collections together with rapid and decisive actions.” More full-price sales combined with strong cost control enabled the company to already turn to profit in the third quarter, with preliminary results showing profit before tax of approximately SEK 2 billion.
The final results for the third quarter and the nine-month period 1 December 2019 – 31 August 2020, will be published on 1 October 2020.
The results from H&M and quick return to profitability far exceeded market expectations. For several months, analysts have suggested that it could take a considerable amount of time for fashion retailers to return to profitability. However, H&M still faces an uncertain period with several of its major markets apparently teetering on the brink of a second ‘lockdown’ as positive tests for coronavirus continue to rise.