Shares of Hennes & Mauritz AB, commonly known as H&M Group (HNNMY.PK, HMRZF.PK, HEN.L), fell approximately 6% in early trading on the Stockholm Stock Exchange following the Swedish apparel giant’s announcement of weaker profit and sales figures for its third quarter. Looking ahead, the company anticipates improved sales for September.
Additionally, the board of directors has authorized a repurchase of H&M class B shares worth 1 billion Swedish kronor, as per the mandate from the annual general meeting. This buyback program starts today and will run until no later than November 26.
The purpose of this initiative is to transfer capital back to shareholders and adjust the company's capital structure. H&M’s total share count stands at 1.61 billion, which includes 194.4 million A shares and 1.42 billion B shares. Presently, H&M holds none of its own shares.
For the third quarter, profit attributable to shareholders dropped to 2.32 billion kronor, compared to 3.33 billion kronor in the same period last year. Earnings per share decreased to 1.44 kronor from the previous year’s 2.04 kronor.
Operating profit also saw a decline, falling to 3.51 billion kronor from 4.75 billion kronor last year, with the operating margin narrowing to 5.9% from 7.8%.
Net sales for the third quarter decreased to 59.01 billion kronor from 60.90 billion kronor in the previous year. When measured in local currencies, net sales remained flat year-over-year.
For the current quarter, H&M highlighted that their autumn collection has been positively received, with September 2024 sales expected to rise by 11% in local currencies compared to the same period last year.
However, the company also anticipates a slight increase in markdown costs relative to sales in the fourth quarter compared to the previous year.
As of the latest trading session in Stockholm, H&M shares were priced at 169.85 kronor, reflecting a 6.34% drop.
