H&M Group, a leader in the fashion industry, encountered slow sales in the third quarter of 2024, impacting its financial performance.
- Net sales for the period were recorded at SEK 59bn (£4.35bn), slightly down from the previous year, reflecting flat sales in local currencies.
- Operating profit took a hit, decreasing to SEK 3.5bn (£250m) from SEK 4.7bn (£3.7bn) in the third quarter of 2023.
- Despite initial challenges, the group anticipates a sales boost in September with an expected 11% increase year on year in local currencies.
- Strategic expansions, such as new store openings and digital enhancements, are anticipated to bolster future sales.
H&M Group has reported a slump in sales for the third quarter of 2024, with net sales totalling SEK 59bn (£4.35bn) compared to SEK 60.9bn (£4.5bn) in the same period in 2023. Sales remained flat in local currencies, highlighting a challenging period for the Swedish fashion giant.
The group’s operating profit also declined, dropping to SEK 3.5bn (£250m) from SEK 4.7bn (£3.7bn) in the previous year. This decrease in profit underscores the difficulties faced during this quarter.
The quarter was marked by slow sales in June, primarily due to unfavourable weather conditions in key European markets. However, H&M Group managed to conclude the quarter with sales level with last year in local currencies.
Positively, the group’s autumn collection has been very well received, providing a promising outlook as sales in September 2024 are projected to increase by 11% in local currencies.
H&M Group is advancing its growth strategy by opening new stores and enhancing digital offerings. These initiatives include the inauguration of H&M Beauty’s flagship store in Sweden and the expansion into digital stores on platforms like China’s Douyin and Pinduoduo. Additionally, the first H&M store in Brazil is expected to launch in São Paulo by the end of 2025.
External factors, specifically the rising cost of living, have exerted pressure on sales revenue and increased purchasing costs. The group anticipates a lower operating margin, potentially falling below 10% this year.
Despite these challenges, H&M Group remains committed to strengthening their brand through investments in products, shopping experiences, and marketing, which are already showing promising signs of impacting sales and profitability, according to CEO Daniel Ervér.
H&M Group remains resilient in the face of challenges, relying on strategic developments to drive future growth.
