H&M has warned of a “very negative” impact from higher purchasing costs for the rest of the year due to the strong U.S. dollar, which also dented second-quarter profits.
The group, which updated the market on its third-quarter sales this morning, cited external factors such as raw material prices, cost inflation, capacity at suppliers, purchasing currencies and transportation costs as having a negative effect in the last three months.
Quarters three and four could get even worse due to the rise in the US dollar.
Sales were also impacted by costs related to long-term investments by the brand, which CEO Karl-Johan Persson deemed as “necessary in order to build an even stronger H&M.”
“Among other things, these investments enable us to be a natural part of our customers‘ increasingly digital world, where the boundary between shopping online and in physical stores is becoming more and more seamless. Our goal is to offer a customer experience in which online and stores are closely interwoven, which will strengthen our customer offering further,” he added.
As well as spending on its ecomerce business, the retailer is poised to launch its own-branded beauty line, H&M Beauty, which will debut in 900 stores across 40 markets this year.
