H&M Returns to Profits as In-Store and Online Sales Grow

The Swedish retailer is recording a 75 percent increase in its total sales for Q2, both online and in-store, as more stores re-open worldwide and the global population continues to get vaccinated.

“As more and more people are vaccinated and restrictions are eased, the world is gradually opening up and customers can once again visit our stores,” said Helena Helmersson, the CEO of H&M Group.

In early March, roughly 1,300 of its 5,000 stores were closed due to COVID-related restrictions. Currently, 95 of its 5,000 stores remain closed temporarily. “Online sales have continued to develop very well, even as the stores have opened. This shows that customers appreciate the collections and being able to shop via their preferred channel,” Helmersson said.

In its second-quarter update, H&M reported a 75 percent increase in its total sales from 1 March 2021 to 31 May 2021, compared to the corresponding period last year.

Sales in the period of June 1-28, H&M’s sales were up 25 percent compared to 2020, but down slightly (four percent) compared to 2019. The retailer reported an EBIDTA of 3.59 crowns ($5.76 million). These numbers were above what was expected, due to the ongoing COVID-related drop in sales from the year before.

Despite this above-expected growth for the retailer, its sales in China fell 23 percent after it was wiped from Tmall and app stores in March. H&M expressed its concern about alleged human rights abuse in Xinjiang, which Helmersson said was a ‘complex’ issue. “With regards to China, the situation remains complex. Beyond that we refer to what we have said before,” she said.

China’s sales account for approximately five percent of total retail sales and are one of the company’s top two suppliers.

The Swedish retailer opened a further 50 stores in the first half of the year, partially offsetting the 155 stores it closed permanently. H&M launched its online platforms in Qatar and debuted on the platform Zalora in Indonesia, Singapore and Malaysia.

“In the wake of the pandemic, we are seeing increasing demand globally for fashion that provides value for money and is sustainable, which we are well-positioned for. Our brands are also offering an increasing number of services for a more sustainable lifestyle,” the CEO said.

“In combination with our work to become circular and climate positive, we are also increasing the share of sustainable and renewable materials. We are developing the existing business and are also creating new complementary revenue streams. Together with profitable online growth and continued store optimisation, this will contribute to long-term, profitable and sustainable growth for the H&M group.”

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