Chilly spring bites into H&M’s profits
Fashion retailer H&M, which has nines stores in Northern Ireland, has blamed cold weather for a worse-than-expected set of results in the second quarter.
Pre-tax profits in fell 17% to 7bn Swedish krona (£576m) as the firm was stung by having to discount items that did not sell during a soggy March and April and fluctuations in the dollar.
The Swedish company said the results were “significantly below” plan, although better sales in May helped offset the slump.
Chief executive Karl-Johan Persson admitted that it had been a “challenging half-year” for fashion retail, adding: “The sales increase in March and April was significantly below our plan. These two months were negatively affected by cold spring weather in many of our markets.
“The fact that the sales increase in the quarter was below plan naturally also had an impact on profits. It has been a challenging half-year for fashion retail in many markets, but we still have great confidence going forward.”
Profits for the first half of the year also fell, from 13.1bn Swedish krona (£1bn) to 10.3 Swedish krona (£848m).
H&M, which has 4,077 stores worldwide, said overall sales in its second quarter were up 5% while in May they rose 9%.
Sales also rose by 1% in the UK in the first half of the year, but flatlined in Germany, H&M’s biggest market.
Mr Persson said he was confident the company would see good growth in future.
“The combination of strong brands, a large body of retail stores in good locations and a successful e-commerce business puts us in a unique market position for growth,” he added.
He also claimed there was still potential for H&M to grow through physical stores, despite the growth of e-commerce.