H&M Q1 sales up 8 percent but warns of coronavirus impact
Prachi Singh| Monday, March 16 2020
In the first quarter of 2020, the H&M group’s net sales increased by 8 percent to 54,948 million Swedish krona (5,652 million dollars), while in local currencies net sales increased by 5 percent. The company said in a statement that sales development in the second half of the quarter was negatively impacted by the outbreak of the COVID-19 virus, particularly in China.
From December 1, 2019 to January 23, 2020 sales in China increased by 27 percent in local currency, however, demand then decreased significantly as a result of the rapid development of the virus and therefore H&M group’s sales in China decreased by 24 percent in the quarter as a whole. At its peak , 334 of the group’s 518 stores in China were closed in February.
H&M feels Coronavirus impact
Excluding China, Hong Kong, Singapore, Macau, Japan and Taiwan, the company added, the H&M group’s sales in the quarter increased by 7 percent in local currencies. So far in March, H&M further said, sales have been negatively affected mainly in Europe as a consequence of the continued spread of the virus. The situation in every country is changing rapidly.
Following decisions by the authorities, all of the group’s stores are temporarily closed in Italy since the past few days and during the weekend all stores were also closed temporarily in Poland, Spain, the Czech Republic, Bulgaria, Belgium, France and partly in Greece. All of the group’s stores in Austria, Luxembourg, Bosnia-Herzegovina, Slovenia and Kazakhstan are closing from Monday. In China sales have gradually started to recover as the situation in the country has improved.