The H&M group announced that its net sales amounted to US$15,055 million in the first nine months of the financial year.
SEE ALSO : H&M announces financial results
Sales development was significantly negatively affected by the Covid-19 situation, particularly in the second quarter when stores were temporarily closed in most markets; at the most, approximately 80 percent of the group’s stores were closed.
The H&M group’s net sales amounted to US$5,695 million in the third quarter. In local currencies, net sales decreased by 16 percent. Sales were affected by the Covid-19 situation. At the beginning of the quarter approximately 900 of the group’s more than 5,000 stores were temporarily closed. At the end of the quarter just over 200 stores were temporarily closed.
Gross profit amounted to US$2,782 million which corresponds to a gross margin of 48.9 percent. Profit after financial items amounted to US$264 million. Excluding IFRS 16, profit after financial items amounted to US$253 million.The group’s profit after tax amounted to US$203 million. Excluding IFRS 16, profit after tax amounted to US$195 million.
The H&M group’s liquidity remains good. As at 31st August 2020, cash and cash equivalents amounted to US$1,358 million. Cash and cash equivalents plus undrawn credit facilities totalled US$4,636 million.
The H&M group has taken rapid and decisive action to manage the Covid-19 situation. This crisis work has covered all parts of the business, including product purchasing, investments, rents, staffing and financing. Combined with much-appreciated collections and strict cost control, this has led to a rapid recovery in results.
The H&M group’s omnichannel model, which combines strong and profitable online growth with optimisation of the store portfolio, is gradually leading to increased value creation.
Sales in September 2020 decreased by 5 percent in local currencies compared with the same period last year. Currently 166 stores, representing 3 percent of the total number of stores, are still closed. A large number of stores still have local restrictions and limited opening hours.
The rapid changes in customer behaviour have been accelerated by Covid-19. The H&M group is therefore now stepping up the pace of its transformation work further, with digital investments, optimisation of the store portfolio and increasingly integrated channels.
Around a quarter of the H&M group’s stores have a contractual right to renegotiate or exit their leases each year. For 2021 a net decrease of around 250 stores is planned.
“More and more customers started shopping online during the pandemic, and they are making it clear that they value a convenient and inspiring experience in which stores and online interact and strengthen each other. The substantial investments made in recent years have been very important for our recovery and we are now accelerating our transformation work further to meet customers’ expectations. We are increasing digital investments, accelerating store consolidation and making the channels further integrated. To ensure that our offerings are relevant to customers and improve availability in all channels, speed and flexibility will be even more important in the future, particularly in the supply chain,” said Helena Helmersson, CEO.