Hennes & Mauritz AB (H&M), one of the largest European fashion retailers, reported that its profit fell 2.1 times to 1.821 billion Swedish kronor ($202.7 million) in the third fiscal quarter, which ended on August 31. This figure exceeded analysts' forecasts. Their estimates reached 1.41 billion kronor.
As follows from the press release of the company, it has already passed the most difficult stage associated with the pandemic. Strict cost control, good consumer demand and strong sales of no-discount products did their job, and H&M recovered faster than expected.
In the second financial quarter, H&M's revenues fell 19% to 50.87 billion kronor from 62.57 billion kronor a year earlier. The drop in revenue in national currencies was 16%.It should be noted that the situation began to improve in September. The decline in revenue in national currencies was only 5%. Still, 166 of more than 5 thousand H&M clothing stores remain closed. Due to the global lockdown, consumers prefer to shop online. As a result, the company is working on optimizing its store portfolio and developing an online shopping system. H&M plans to close approximately 250 stores next year.
Thus, about a quarter of H&M stores are eligible for annual renegotiation or cancellation of leases, which gives the company the opportunity to close some of them. H&M shares are growing steadily during today's trading. Since the beginning of the year, the company's capitalization has decreased by 12.4% to approximately 255 billion kronor.
