Though H&M reported lower sales during the nine-month from December 2019-August 2020 loss, it returned to profitability in September as sales recovered in many of its markets. The brand’s sales decline narrowed to 5 per cent year-on-year in September. Currently 166 of its stores are closed, although a large number of stores have opened with local restrictions and limited opening hours.
From June-August, net sales of the Swedish fashion retail giant fell by 16 per cent in local currencies to SEK50.87 billion. Its gross profit for the quarter dropped to SEK24.85 billion from SEK31.81 billion in the prior year’s Q3it. This corresponds to a gross margin of 48.9 per cent.
Profit after financial items was SEK 2.36 billion. Excluding IFRS 16, profit after financial items plunged to SEK2.26 billion from SEK5 billion. The brand’s sales during the nine-month period were significantly affected by the COVID-19 situation. Its net sales fell to SEK134.48 billion from SEK171 billion a year ago as Q2 included the height of the pandemic.
The company made a loss of SEK1.613 billion during the nine months and a net loss of SEK1.24 billion. Excluding IFRS 16, its loss was SEK1.847 billion, much worse that the profit of SEK11.98 billion a year earlier.
The firm is on a recovery trajectory even though it’s far from business-as-usual as fashion sales remain challenged globally.