H&M profits jump amid rebound in store footfall

H&M nearly tripled profits in the last quarter thanks to a “strong rebound” in sales as restrictions eased across the world.

The Swedish distribution giant confirmed to shareholders on Thursday that it had reinstated its dividend for the first time in 18 months.

It reported pre-tax profit of SEK 6.1 billion (£ 520 million) for the quarter ended Aug.31 compared to the same period last year, ahead of analysts’ forecasts.

The group said it was supported by 14% sales growth for the period as footfall improved across all of its stores.

Helena Helmersson, CEO of H&M, said: “The increase in profits for the H&M group shows that the strong recovery continues – despite sales partially affected by the restrictions and delays associated with the pandemic.

“The results are driven by highly regarded collections, lower markdowns and good cost containment combined with initiatives implemented in areas such as technology and supply chain.

“As restrictions were relaxed in many markets, in-store sales started to rise again, while online sales continued to grow. “

H&M added that its new fall collections were “well received” and that September sales were “slightly higher” than the same month last year.

However, he reported that demand could not be fully met due to “disruptions and delays in product flow” as it became the last retailer hampered by global supply issues.

Ms Helmersson added: “The pandemic and its aftermath are not over yet and we are humbled by the many challenges in the world around us that affect our business, which require a high level of flexibility and drive.

“We quickly adapted by focusing on cash flow, cost control and flexibility.

“With our continued transformation and our well-positioned customer offering – to meet ever-increasing customer expectations for value and sustainable fashion – we are optimistic about long-term, profitable and sustainable growth for the H&M Group. “