H&M has announced it expects to return to profitability after experiencing a “better-than-expected” recovery during the third quarter of the year.
For the 13-week period ending 31 August the Swedish clothing retailer said it expects before-tax profit of approximately SEK2b (£176m).
The group said the recovery was the result of “appreciated” collections and “rapid and decisive” actions. More full-price sales and “strong” cost control also contributed to the turn to profit, according to the group’s report.
However, H&M added that net sales for the third quarter decreased by 16% in local currencies compared with this time last year. Converted to SEK, net sales decreased by 19% to SEK 50,870m (62,572).
By comparison, in the second quarter of this year (1 March- 31 May) net sales for the group had decreased by 50% compared with the previous year.
H&M said the results “reflect the Covid-19 situation”. At the start of the quarter, around 900 of the group’s 5,000 stores were temporarily closed. By the end, around 200 stores remained closed.
H&M announced its full results will be published on 1 October 2020.