Shares in Hennes & Mauritz (H&M) were up by almost 13% this-morning (17 September) as the Swedish fashion retailer regained its upward trajectory after two straight quarters of flat sales growth.
In a trading update for its third-quarter, the retailer said group sales, including VAT, increased 9% to SEK64.8m (US$7.2m) from SEK59.4m in the year-ago period. Meanwhile, sales excluding VAT, amounted to SEK55.8m, compared to SEK51.2m last year. In local currencies, sales including VAT increased by 4%.
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H&M has battled with slowing sales and falling profits in the last few years as a result of declining footfall due to changes in customer behaviour, particularly in its namesake stores.
Earlier this year, the retailer identified three action areas in the wake of a disappointing full-year and fourth-quarter performance, including further investment in its supply chain and the launch of a discount fashion site called Afound.
Today, the group said this transition contributed to a “gradually improved sales development” and increased market share in many markets in the third quarter.
However, it noted sales and cost development in some of the group’s important markets such as the US, France, Italy, and Belgium were “considerably affected” in the period by issues around the implementation of new logistics systems in the spring. The new systems will enable a faster and more efficient supply chain as well as a continued integration of store and online.
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By GlobalDataThe group will publish its nine-month report on 27 September.
