H&M Q3 sales up despite aggressive markdowns
Swedish fashion giant Hennes & Mauritz (H&M) has posted a rise in sales during the third quarter, but said growth was impacted by aggressive markdowns during its summer sale.
In a trading update today (15 September), the world's second largest fashion retailer said group sales grew 4% in local currencies during the period from 1 June to 31 August, compared to the corresponding quarter last year. Converted into SEK and including VAT, sales increased by 5% on last year to SEK 59.38bn (US$7.46bn). Sales excluding VAT were SEK 51.23bn, an increase of 5%.
H&M said sales in the quarter were affected by a "significantly larger" summer sale this year than in the corresponding quarter last year – both in terms of the number of items and the average discount per piece – which had a "dampening effect" on revenue growth.
However, the summer's aggressive mark-downs led to an improved inventory position and good conditions for the incoming autumn garments. This helped sales of the autumn collections get off to a good start, the retailer added.
Meanwhile, the total number of stores in the group rose to 4,553 on 31 August 2017, compared to 4,135 on the same date last year.
H&M will publish its nine-month report on 28 September.
Last week, the fashion retailer revealed it has partnered with the Indonesian arm of French consumer giant Danone, bottled water brand Aqua, and one of its most sustainable suppliers, to turn plastic waste into clothes. The Bottle to Fashion initiative aims to recycle used PET water bottles and turn them into H&M clothing items for its global ranges.