H&M Q2 sales rise but store numbers rise faster

Trading statements and results announcement are being closely watched at present as some global markets prove to be tough for fashion chains. So H&M was in the spotlight on Friday as it reported Q2 sales up 2%. 


H&M


While that looked good on the surface, we can’t ignore the fact that the company’s ongoing store opening programme means it was selling from over 6% more stores in the second quarter of this financial year than it was a year ago.

So to the figures. It said that sales including VAT in the three months to the end of May rose to SEK60.464 billion from SEK59.538 billion. Excluding VAT they were up to SEK51.983 billion from SEK 51.838 billion. In local currencies sales including VAT “were unchanged.”

The total number of stores in the group, whose banners are expanding as it adds new chains to the line-up, amounted to 4,801 as of May 31 compared to 4,498 this time last year.

So why was growth so weak? Well, we don’t actually know that as H&M was saying little. That’s in line with its strategy of saving its information sharing for its bigger results announcements. That means we may hear more on June 28 when it publishes its full six-month report and CEO Karl-Johan Persson hosts a press conference. 

But it seems clear that H&M has been suffering from many of the same issues as those that have beset both its weaker and stronger fashion retail peers.

Even Inditex reported slightly slower growth earlier this week and Ted Baker also turned in a physical stores performance that was slower.

The fact is that weather woes and exchange rate issues, as well as excessive consumer caution and a rapid move to e-shopping in certain key markets have played havoc with fashion retail of late and even the biggest, most powerful players in the market aren’t immune.

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