H&M sales surges, with notes
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H&M sales grew by the fastest rate in three years during the latest quarter – but analysts suspect it is due to discounting of inventory and favourable currency swings. According to a stock exchange filing, H&M revenue rose 12 per cent to 56.4 billion krona (S$6.23 billion) in the November quarter.
But the fast-fashion retailer has been battling to move a huge inventory, estimated in March as worth a staggering $4.3 billion.
This week’s filing covered only sales, with full details of H&M’s trading performance set to be revealed on January 31.
Some analysts have described it as “possible” the sales growth was not profitable given sweaters have been selling for as little as $10 in recent months.
Questions & Answers
Q.What is the primary reason analysts believe H&M's sales surged in the latest quarter?
What is the primary reason analysts believe H&M's sales surged in the latest quarter?
Analysts suspect the sales growth is largely attributable to the discounting of existing inventory. Favourable currency movements also played a role in the reported revenue increase during the November quarter.
Q.When will the full details of H&M's trading performance for the latest quarter be made public?
When will the full details of H&M's trading performance for the latest quarter be made public?
The comprehensive details regarding H&M's trading performance, beyond just sales figures, are scheduled to be disclosed on January 31. This will provide a clearer picture than the recent filing.
Q.How large was H&M's inventory estimated to be earlier in the year?
How large was H&M's inventory estimated to be earlier in the year?
In March, H&M's inventory was estimated to be worth a substantial $4.3 billion. The company has been working to reduce this significant stock level.
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