Retail giant H&M posts higher quarterly sales but shares slip

It comes weeks after the retailer confirmed plans to cut 1,500 head office jobs globally as part of cost-cutting plans.

On Thursday, the group said net sales increased by 10 per cent to 62.4bn Swedish krona (£4.9bn) over the three months to November 30, compared with the same period last year.

It said this represents an 11 per cent increase excluding operations in Russia, Belarus and Ukraine.

The retailer wound down its business in Russia and Belarus during the quarter, with the remaining stock sold off and the last shops closed on November 30.

Sales for the financial year to November were 12 per cent higher at 223.5bn Swedish krona (£17.7bn) as a result.

H&M said it was also hit by the temporary closure of between 25 to 50 stores in China over the latest quarter as a result of new Covid-19 outbreaks.

The update comes a day after Zara-owning rival Inditex recorded a 19 per cent sales jump for the past nine months alongside higher profits.

Victoria Scholar, head of investment at Interactive Investor, said: “Although the Swedish fashion retailer is dealing with pressures from cost inflation, a weakening consumer and the economic slowdown, it managed to top expectations in terms of quarterly sales thanks to its attractive discounts and stronger demand in the all-important build up to Christmas.

“Customers may also be switching from more expensive brands towards cheaper labels like H&M when buying winter essentials like coats and gloves to offset pressures from the cost of living.

“Shares are trading lower today, caught up in the broader risk-off market mood.

“H&M has shed more than a third of its stock market value this year, sharply underperforming its rival Inditex, which is down a more modest 10 per cent.”

Nick Drewe, a retail expert at online discounts platform, Wethrift, added: “Zara is one of the world’s biggest fashion retailers, and perhaps a prime example of consumers steering their buying behaviours away from lower quality fast fashion, and investing in higher quality items.

“Sustainability is continually becoming a significant factor in the world of fashion, and several huge brands such as Zara competitors H&M, Mango, Uniqlo and ASOS are all doing their bit to provide customers with a buying experience that generates more good for the environment than damage.”