H&M lowers profit target as sales flatline in Q3
During the autumn H&M is opening digital stores on Douyin and Pinduoduo, two of China’s biggest e-commerce platforms
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H&M has revealed that it does not expect to hit its profit margin of 10% which it forecast for the full year as it posted flat net sales of SEK59bn (£4.35bn) for the three months ended 31 August 2024.
Its operating profit in the third quarter dropped 26% to SEK3.5bn (£260m), well below the average analysts’ expectations of SEK4.9bn (£360m).
As a result, its profit after tax amounted to SEK2.3bn (£170m), corresponding to SEK1.44 (£0.11)per share.
Furthermore, its gross profit amounted to SEK30.1bn (£2.22bn) corresponding to a gross margin of 51.1%.
However it said Sales in the month of September 2024 are expected to increase by 11% in local currencies compared with the same month the previous year.
Alongside this, the first flagship store for H&M Beauty in Sweden was opened in September and the first H&M store in Brazil will open in Sao Paulo at the end of 2025.
During the autumn H&M is opening digital stores on Douyin and Pinduoduo, two of China’s biggest e-commerce platforms.
Daniel Ervér, CEO, said: “Despite a challenging start, we are concluding the third quarter with sales on par with last year in local currencies and with good cost control. We are strengthening the H&M brand by investing in products, the shopping experience and marketing, which we are already seeing start to make an impact and which will contribute to increased sales and profitability.”
