Premium fashion retailer H&M unveiled its third quarter financial results on Thursday, following a conference call with journalists.
The H&M group’s sales excluding VAT increased by 11% in local currencies during the quarter ending on 31st August. All brands were well received, and the Swedish company’s market share also increased. At the same time, group wide profit margins were at an 11 year low.
The real success, however, may well be in the company’s impressive expansion. H&M Beauty, which started in July, can now be found in 700 stores, 28 markets and at hm.com. The company has plans to open 240 new stores in the next quarter, most notably in India and South Africa: two new market territories.
H&M CEO Karl-Johan Persson said the improved sales was “an acknowledgement that our collections are well appreciated worldwide.
“Sales were also good in the third quarter even though sales in August were negatively affected by the unseasonably warm weather in many of our large European markets. When the weather become more normal in September, sales took off again and we are looking forward to an exciting fashion autumn.”
Like other retailers who purchase from Asian manufacturers, H&M’s profits this quarter were “negatively affected by increased purchasing costs due to the strong US dollar,” Persson continued. It remains to be seen whether this will force H&M to raise prices in store.
Persson also spoke about how H&M is expanding its online capabilities. “We will open our H&M online store in both Switzerland and Russia during this autumn, giving us 23 H&M online markets at the end of the financial year. In 2016 we plan to offer e-commerce in a further nine existing H&M markets. These countries will be Ireland, Japan, Greece, Croatia, Slovenia, Estonia, Latvia, Lithuania and Luxembourg.”
According to the results, H&M’s plans with Fair Living Wages and recycling are also progressing well.