H&M sees another sales dive in Q1, but Q2 starts on a high
H&M Group’s net sales continued to fall in Q1 (the three months to the end of February) with a 21% drop in local currencies. Converted to SEK, net sales fell to SEK40 billion (€3.9bn/£3.4bn/$4.9bn) from SEK54.9 billion a year earlier.
Both figures may show sizeable falls, but analysts had expected much worse. They’d predicted that sales would be down by as much as 30% in local currencies. And sales have picked up since the period ended with March proving to be such stronger.
H&M said online sales “continued to develop very well” in Q1, but sales were still “significantly affected by the Covid-19 situation, with extensive restrictions and (at most) over 1,800 stores temporarily closed”.
Yet the situation seemed to be improving as early as February, with the start of the month seeing reopenings in a number of markets, which meant that at the end of the quarter only around 1,300 stores remained temporarily closed.
And as of March 13, following Germany’s gradual reopening, the number of closed stores was down to 900. That helped sales during March so far (up to Saturday) to rise as much as 10% in local currencies. The company will have been helped by the launch this month of the Simone Rocha collaboration, which appears to have been a sell-out so far (although returns could see its online 'sold out' signs being removed in the weeks ahead) .
The company will report its full three-month results on the last day of this month.
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