Sales at H&M stores sees strong growth
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Sales at H&M stores worldwide rose by the steepest rate in three years in the third quarter.
“Well-received summer collections and increased market share confirm that the H&M group is on the right track with its transformation work,” the company said in a statement.
Net sales rose by 12 per cent to US$6.48 billion in the three months to August 31, marking the company’s fifth consecutive quarterly increase. Excluding currency fluctuations, sales were up by 8 per cent.
However, analysts took a little of the gloss off the figures pointing out that during the comparable period a year ago, the company’s turnover was hit by difficulties implementing a new logistics system in some markets.
Besides its namesake brand, H&M operates Arket, Weekday, Cos, Monki, and & Other Stories.
Full-year results will be released on October 3.
While the global third-quarter result was strong, sales at H&M stores in the UK have plummeted, leading to a 71.2-per-cent crash in full-year pre-tax profits to £10.72 million, according to figures obtained by Retail Gazette.
Questions & Answers
Q.What contributed to the increased sales for H&M globally during the third quarter?
What contributed to the increased sales for H&M globally during the third quarter?
The company attributed the strong global sales growth to well-received summer collections. They also noted increased market share, suggesting their transformation efforts are proving successful.
Q.Were the latest sales figures uniformly positive across all markets for H&M?
Were the latest sales figures uniformly positive across all markets for H&M?
No, despite strong global results, sales at H&M stores in the UK actually plummeted. This downturn led to a significant 71.2 per cent crash in full-year pre-tax profits within the UK market.
Q.What impact did currency fluctuations have on H&M's sales growth this quarter?
What impact did currency fluctuations have on H&M's sales growth this quarter?
H&M's net sales rose by 12 per cent when reported. However, excluding the effects of currency fluctuations, the company's sales growth was an underlying 8 per cent during the period.
Q.Why might the strong sales growth figures not be as impressive as they initially appear?
Why might the strong sales growth figures not be as impressive as they initially appear?
Analysts pointed out that the comparable period last year saw the company's turnover negatively affected. This was due to issues with implementing a new logistics system in some markets, providing an easier benchmark for growth.
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