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H&M warns Covid consequences are “not over yet”

// H&M revenues and profits increase despite Covid restrictions
// As many as 1800 stores internationally were closed at one time or another during 9 months

H&M has recorded a rise in revenues and profits but has warned on international Covid restrictions slowing its growth.

The fashion retailer saw profits after financial items come in at SEK8.29 billion (£0.70 billion) between December 1, 2020, and August 31, 2021.

This marked an increase of SEK1.6 billion (£0.13 billion), while profit after tax was SEK6.38 billion (£0.54 billion).

READ MORE: H&M lags behind Inditex in the race to regain lost sales

Group revenues in local currencies grew 13 per cent for the period, up to SEK142.1 billion (£12.02 billion) when converted into Swedish krona.

H&M said the nine-month period was impacted by Covid restrictions, particularly around store closures.

The retailer said as many as 1800 of its stores internationally were closed at one time or another during the nine months.

Cash flow from operating activities for the period increased to SEK37.2 billion (£3.15 billion), while financial net cash increased to SEK24.8 billion (£2.10 billion).

“The H&M group’s increase in profit shows that the strong recovery is continuing – despite sales being partly affected by restrictions and delays associated with the pandemic,” H&M chief executive Helena Helmersson said.

“The results are explained by much-appreciated collections, lower markdowns and good cost control combined with the initiatives implemented in areas such as tech and the supply chain.

“As restrictions have been eased in many markets store sales have started to pick up again, all while online sales have continued to grow.

“The pandemic and its consequences are not yet over and we are humbled by the many challenges in the world around us that affect our business, which call for a high level of flexibility and drive.

“We have quickly adapted by prioritising cash flow, cost control and flexibility. With our continued transformation and our well-positioned customer offering – to meet customers’ ever-increasing expectations of good value and sustainable fashion – we are optimistic that we will see long-term, profitable and sustainable growth for the H&M group.”

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