H&M losses worsen as pandemic hurts sales
Losses at H&M were slightly worse than expected in the second quarter as shopper activity slumped amid the coronavirus pandemic.
The world’s second biggest fashion retailer said its loss before tax in the three months to May was 6.48bn Swedish crowns (£559.4m), against a profit of 5.93bn crowns a year earlier.
Analysts had on average forecast a 6.44bn crown loss for the period, according to Refinitiv data.
H&M, which also owns the Cos, & Other Stories, Weekday and Arket brands, had warned in April it would swing into a loss due to the pandemic.
It said today it would speed up store closures to recover costs, and open fewer new stores this year than planned earlier.
Net sales fell 50 per cent to 28.66bn crowns across the group, with around 80 per cent of its stores closed in mid-April due to lockdown measures. However online sales in local currencies rose 32 per cent.
In June alone, sales have decreased by 25 per cent in local currencies compared to the same period the previous year. Currently seven per cent of the company’s stores are still closed.
The retailer said it is accelerating transformation plans towards digitalisation of the supply chain and the organisation, in order to better cope with the pandemic going forward.
“As we have reopened our stores, sales have begun to recover at a faster rate than expected,” said chief executive Helena Helmersson.
“To meet the rapid changes in customer behaviour caused by Covid-19 we are accelerating our digital development, optimising the store portfolio and further integrating the channels.”
Shares in H&M fell 1.6 per cent as markets opened this morning.