The Swedish firm H&M has presented results for its third quarter. During the summer months, profits have been reduced by 30%, which has led him to have to cut forecasts. In addition, sales were 59,011 million Swedish crowns, about 5,210 million euros, 3% less than those recorded in the same quarter of the previous year.
Paradoxically, The market where it has ‘suffered the most’ is northern Europehis birthplace; a fact that coincides with Inditex continuing its European expansion, mainly in areas where the Swedish company is strongest.
H&M was founded in Stockholm (Sweden) in 1947 and, still today, is the queen of textiles in northern Europe. However, this last quarter things have not gone so well there, and it has been the market with the greatest reduction in sales. Specifically, the Swede has lost in the Nordic countrieshis own house, 9% of sales analyzing the data in Swedish crowns.
During the third quarter of 2023, sales worth 5,809 million Swedish crowns (about €511 million) were made in the Nordic countries. In the same period of 2024, sales in northern Europe only stood at 5,313 million (467 million euros). That is, between one quarter and another, sales in the northern market have decreased by 10%.
For its part, the only two markets where H&M has been able to grow have been Eastern Europe and Southern Europesince both in the West and in America and the rest of the continents have seen their sales reduced. Although his birthplace is northern Europe, right now the strong business is in the Westsince in those countries it accumulates sales worth 19,731 million crowns (1,734 million euros). In any case, its growth has also been reduced there, as sales have fallen by 4%.
H&M reduces its profits
H&M has faced a setback this quarter in terms of economic growth. Apart from reducing its global sales by 3%, the chain earned 2,307 million crowns net (204 million euros) between June and August, 30% less than the previous year. “The quarter started with slow sales in June due to cold weather in many of our key European markets. In July and August we saw a rebound, with even stronger development in September,” the company itself acknowledges in the results report.
Furthermore, ebit fell by 26% to 3,507 million crowns (310 million euros), due to the negative effects of currency exchange due to the revaluation of the Swedish crown and the costs derived from the closure of Afound, H&M’s chain of stores and online commerce platform to revalue the stock in liquidation.
“Consumers’ costs of living have remained high throughout the year, and at the same time, we continue to see turbulence in the world around us. External factors have affected our income for sales and purchase costs more than we expected. Currently, we estimate that this year’s operating margin will be less than 10%,” they add.
Inditex continues to grow in Europe
While H&M is facing a complicated time, Inditex does not stop growing in those territories where the Swedish company has a large presence. In the 4 three Nordic countries, Inditex only has 24 stores (5 in Finland, 13 in Sweden, 5 in Norway and 1 in Iceland). But Its presence in Europe has been increasing considerably in recent yearsespecially in the areas of Western Europe.
An example of this is that Europe is the only market where Inditex has increased the number of sales per store (beyond Spain). In the first half of the year, The old continent accounted for 49.9% of the group’s salescompared to 47.8% in the same period of the previous year. That is to say, Inditex’s presence in the rest of Europe has increased by 5%, while H&M continues to lose presence there.
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