H&M returns to profit, but sales recovery uneven

STOCKHOLM: Sweden’s H&M swung back to profit in its second quarter but sales growth slowed ater mid June, highlighting a patchy recovery from the pandemic as restrictions ease and stores reopen.

The world’s second-largest fashion retailer on Thursday reported a stronger than expected profit for the three months through May.

Sales for June 1-28 were up a quarter year-on-year but 4 per cent lower than in pre-pandemic 2019.

Chief Executive Helena Helmersson, speaking to analysts and reporters, atributed the easing in the second half of the month to a combination of factors, including tough year-ago and 2019 comparisons, cold weather last week in some European markets, and how coronavirus restrictions were being eased.

“We see signals of a strong recovery also in June, and that customers appreciate our collections,” she told Reuters.

Analysts said the figures implied sales were down 9% on 2019 in the later two weeks of June, and noted that rival Primark has also said trading was currently very volatile from week to week.

“Recent weeks of trading highlight a mixed demand rebuild,” said Jefferies analyst James Grzinic. H&M’S shares were down 2.4% at 1127 GMT.

Quarterly pretax profit was 3.59 billion crowns ($419 million) against a year-earlier loss of 6.48 billion.

“As more and more people are vaccinated and restrictions are eased, the world is gradually opening up and customers can once again visit our stores,” Helmersson said. “Online sales have continued to develop very well even as the stores have opened.”