H&M profits jump amid store footfall recovery

It reported a pre-tax profit of 6.1 billion Swedish krona (£520 million) for the quarter to August 31 against the same period last year.

The retail group has hailed a ‘strong recovery’ for the past three months (Yui Mok/PA) (PA Archive)

H&M has almost tripled its profit for the past quarter on the back of a “strong recovery” in sales as restrictions eased across the globe.

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

It reported a pre-tax profit of 6.1 billion Swedish krona (£520 million) for the quarter to August 31 against the same period last year, ahead of analyst predictions.

The group said it was buoyed by 14% sales growth for the period as footfall improved across its store estate.

Helena Helmersson, chief executive officer of H&M, said: “The H&M group’s increase in profit shows that the strong recovery is continuing – despite sales being partly affected by restrictions and delays associated with the pandemic.

“The results are explained by much-appreciated collections, lower markdowns and good cost control combined with the initiatives implemented in areas such as tech and the supply chain.

“As restrictions have been eased in many markets store sales have started to pick up again, all while online sales have continued to grow.”

H&M added that its new autumn collections have been “well received” and that sales in September have been “slightly higher” than for the same month last year.

However, it flagged that demand was not able to be fully met due “disruption and delays in product flow” as it became the latest retailer hampered by global supply issues.

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

“We have quickly adapted by prioritising cash flow, cost control and flexibility.

“With our continued transformation and our well-positioned customer offering – to meet customers’ ever-increasing expectations of good value and sustainable fashion – we are optimistic that we will see long-term, profitable and sustainable growth for the H&M group.”