H&M Group has reported sluggish sales in the third quarter, highlighting a challenging economic climate for the retail industry. Despite this, the company maintained stable revenue in local currency terms.
- Net sales reached SEK 59bn between June and August 2024, slightly down from the previous year.
- The operating profit decreased to SEK 3.5bn, with the company citing cold weather and economic challenges as contributing factors.
- H&M has launched new flagship stores and expanded digital platforms to boost future sales.
- The brand sees opportunity for growth with its autumn collection, expecting significant sales increases.
The renowned Swedish fashion retailer, H&M Group, has experienced “slow sales” during the third quarter of 2024. Although net sales hit SEK 59 billion between June and August, this figure represents a slight dip compared to SEK 60.9 billion in the same period of the previous year.
In terms of local currencies, sales remained flat. Despite this stagnation, gross profit stood at SEK 30.1 billion, while operating profit reached only SEK 3.5 billion, a decrease from the SEK 4.7 billion recorded in the previous year. CEO Daniel Ervér attributed the sluggish start to the quarter to unfavorable weather conditions in key European markets: ‘Despite a challenging start, we conclude the quarter with sales on par with last year in local currencies.’
The company noted optimism in its statement, emphasizing the positive reception of its autumn collection. It predicts an 11% rise in September 2024 sales, year-on-year, in local currencies. Efforts to enhance physical and digital retail presence include launching a new flagship H&M Beauty store in Sweden and expanding on China’s e-commerce sites such as Douyin and Pinduoduo. The impending opening of H&M’s first Brazilian store in São Paulo at the end of 2025 is also part of this strategy.
External economic factors, including the cost of living crisis, have impacted purchasing and revenue. The resulting financial strain has led to a forecast that this year’s operating margin will fall below 10%. Nevertheless, as Ervér stated, ‘We are strengthening the H&M brand by investing in products, the shopping experience and marketing, which we are already seeing start to make an impact and which will contribute to increased sales and profitability.’
While facing economic challenges, H&M Group remains proactive in positioning itself for future growth and stability.
