Swedish H&M stated last week, that its net profit more than doubled in the first quarter (1Q) 2023. Thereby defying expectations as analysts were expecting a loss.
Shares in H&M rose following the announcement, rising 9% on the Stockholm stock exchange.
“Although the world around us remains challenging, we are seeing several areas where developments are going in the right direction,” chief executive Helena Helmersson said in the statement.
The company posted a net profit of 540 million Swedish kroner ($51.9 million) for its 1Q, which runs from December to February. Analysts at Bloomberg were expecting an average loss of more than one billion kroner.
A year earlier, the company reported a 1Q profit of 217 million kroner. Net sales rose 12% for the quarter, but the growth was strongly driven by currency effects. In local currencies the growth was instead 3%.
Last quarter, H&M announced an unusual loss, causing fears of the sustainability of its fast-fashion model.
In addition to a widening gap with rival and world leader Inditex – owner of Zara – H&M has also taken hits from high inflation and the emergence of new competitors offering even lower prices, such as Chinese online retailer, Shein.
In November, the group announced a major cost-cutting plan, including 1,500 job cuts.
“The external factors that influence purchasing costs continue to improve. Work on the cost and efficiency program is proceeding at full speed, and many of the changes that we have made in recent years are starting to have an effect,” Helmersson said.
Source: themalaysianreserve.com
