H&M Group has reported slow growth in sales for the third quarter of 2024, with performance stabilising compared to the previous year.
- The Swedish fashion retailer saw its net sales reach SEK 59bn (£4.35bn), a slight decrease from SEK 60.9bn (£4.5bn) in the same period last year.
- Despite challenging conditions, including adverse weather, gross profit amounted to SEK 30.1bn (£2.22bn).
- An anticipated boost in sales is expected due to favourable reception of its autumn collection and upcoming store developments.
- The company aims to enhance its brand by investing in shopping experiences and product offerings to increase profitability.
H&M Group, a prominent name in the fashion industry, has reported a sluggish sales performance in the third quarter of 2024. The group’s net sales were SEK 59bn (£4.35bn) from 1 June to 31 August 2024, slightly down from SEK 60.9bn (£4.5bn) in the comparable quarter of 2023.
In local currencies, the sales figures remained steady year-on-year, despite a noted decline in operating profit to SEK 3.5bn (£250m) compared to SEK 4.7bn (£3.7bn) the previous year. This drop in profit can be attributed to the adverse weather conditions experienced in June across several key European markets, which initially hindered sales growth.
Chief Executive Officer Daniel Ervér remarked that, although the quarter began with challenges, sales eventually aligned with last year’s figures in local currencies. He also noted the positive reception of the autumn collection, which is expected to enhance sales by 11% year-on-year in September 2024.
In a strategic move to bolster sales, the company is strengthening its presence with new store openings and upgrades. Among these are the launch of H&M’s first flagship H&M Beauty store in Sweden and expansion into digital marketplaces in China, specifically on platforms like Douyin and Pinduoduo. Additionally, the group looks forward to inaugurating its first store in Brazil by 2025.
Amidst these developments, H&M Group anticipates external factors, including the cost of living crisis, to continue impacting its sales and purchasing costs. Consequently, the operating margin for the year is predicted to remain below 10%. Despite this, Ervér remains optimistic, highlighting ongoing investments in products and marketing efforts designed to strengthen the H&M brand and enhance profitability.
H&M Group is navigating a challenging retail landscape with strategies to stabilise sales and improve long-term growth.
