Breaking News
Black Friday SALE: Up to 54% off InvestingPro! Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

H&M's Sept sales hit by supply delays after profit tops pre-pandemic level

Stock MarketsSep 30, 2021 06:41AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: Shoppers visit H&M store at Times Square in New York City, New York, U.S., May 20, 2021. REUTERS/Eduardo Munoz 2/2

By Anna Ringstrom

STOCKHOLM (Reuters) -Supply disruptions hampered H&M's sales in September, the Swedish retailer said on Thursday, after its June-August profit surpassed expectations and pre-pandemic levels.

Disruptions to the global economy during the pandemic have upset global supply chains, leading to shortages of goods as well as containers, storage and drivers for the transportation of goods, and causing a spike in shipping costs.

"Sales in September 2021 were slightly higher than in the corresponding month the previous year in local currencies, even though demand was not able to be fully met because of disruption and delays in product flow," H&M said.

Chief Executive Helena Helmersson told analysts and media bottlenecks affecting H&M were mainly in production, transport and ports. She said the situation was now improving at the supplier end but that H&M was bracing for more delays in deliveries in the current quarter.

Fiscal third-quarter pretax profit at the world's second-biggest fashion retailer jumped 158% from a year earlier to 6.09 billion Swedish crowns. Analysts polled by Refinitiv had on average forecast a 5.05 billion crown profit.

Compared to the same quarter in 2019, before the pandemic, profit was up 22%.

"The H&M group’s increase in profit for the quarter is mainly a result of well-received collections with more full-price sales, lower markdowns and good cost control," Chief Executive Helena Helmersson said in a statement.

H&M said around 50 of its 5,000 stores remained temporarily closed currently, against 180 at the start of June. At the height of the COVID-19 pandemic, most stores were closed due to lockdowns and restrictions.

H&M said an advantageous U.S. dollar exchange rate had in its third quarter offset substantially higher prices for shipping and raw materials, but warned:

"As the positive U.S. dollar effect subsides and the high shipping and raw materials prices remain, the overall market situation for purchasing costs in the fourth quarter will gradually become less positive."

Prices for cotton are rising on strong Chinese demand and unfavourable weather in key growing regions.

The group proposed paying a dividend for 2020 of 6.50 crowns per share in November. It had said in July that prospects of paying a dividend in the autumn were very good, after it failed to propose one at its annual general meeting in May.

H&M's shares were roughly unchanged at 0915 GMT.

Market leader Inditex (MC:ITX), the owner of Zara, earlier this month also reported quarterly profits above pre-pandemic levels.

Helmerssom told analysts and media its situation remained complex in China, where the group is suffering a backlash over comments made in 2019 about workers' rights in the Xinjiang province.

H&M's Sept sales hit by supply delays after profit tops pre-pandemic level
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email