By Sweden’s leading fashion retailer, Hennes & Mauritz (H&M), has exceeded expectations for its third-quarter earnings due to its increased focus on profitability and inventory efficiency. Despite this success, the company remains cautious as unusually warm weather in Europe has delayed the start of the autumn season.
For the quarter ending on August 31, H&M reported a net profit of 3.33 billion Swedish kronor ($302.9 million), compared to SEK 531 million in the same period last year. This result surpassed analysts’ forecasted profit of SEK 3.23 billion.
Although sales rose by 6% to SEK 60.9 billion, H&M anticipates a 10% decline in September due to customers postponing purchases of autumn clothing amid the hot weather. Additionally, the company’s decision to exit the Russian market this year has further impacted sales.
H&M is actively implementing a cost and efficiency program to achieve annual savings of SEK 2 billion. The company confirms that this program is progressing well and will continue to yield positive results in the upcoming quarters.
Chief Executive Helena Helmersson emphasized the company’s commitment to customer satisfaction and financial growth, stating, “With a strong customer focus, improved cash flow, and increased inventory efficiency, our goal of achieving a 10% operating margin by 2024 remains unchanged.”
H&M’s operating margin for the third quarter reached 7.8%, a significant improvement from last year’s margin of 1.6%.
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