After a Period of Softness, Has H&M Hit Its Stride?

Amid a challenging retail climate, H&M Group’s efforts to reposition itself appear to be paying off. The Swedish-based company posted a solid preliminary fourth-quarter earnings report today amid a positively received autumn collection and improved online sales.

The report seemingly points to success amid a strategic shift by the fast-fashion giant, which has worked to integrate its physical and online channels, upgrade its supply chain and reduce markdowns, according to CEO Karl-Johan Persson.

As it improves its digital offerings, H&M projects gains of 20% or better in online sales on a yearly basis for the next two years. The firm won’t report its e-comm numbers for Q4 until January but it already saw a 30% bump in Q3, reported in October.

Insiders have also said that improved product offerings have helped drive H&M’s renewed success, with the retailer reporting its first quarterly earnings gains in two years for Q3. In H&M’s third quarter call, Persson said Q4 was off to “a promising start with a positive reception for our early autumn collections,” although he added that it was too early to make full quarter projections at that time.

Additionally, the teen-mall staple said its ongoing work to improve full-price sales and lean on fewer markdowns is paying off and that it has also seen a reduction in inventory overload.

In today’s preliminary report for Q4, or the period ended Nov. 30, H&M reported a net sales increase of 9% to 61.7 billion Swedish krona ($6.59 billion). For the full fiscal year, the retailer’s net sales grew 11% to 232,764 million krona ($24.84 billion), according to the preliminary numbers.

H&M’s solid numbers come following a strong Q3 report posted by competitor Inditex, parent to Zara, earlier this month. Inditex, which like H&M is pursuing stronger online sales, recorded a 14% rise in third-quarter net income.

H&M expects online sales for Black Friday, which are not all included in the Q4 report due to the lateness of the holiday, to equal around 500 million krona ($53.39 million). The full year report will publish on Jan. 30, 2020.

Want more?

H&M CEO: Climate Activism Can Have ‘Terrible Social Consequences’ for the Fashion Industry

After Forever 21, What’s the Next Teen Mall Staple?

Merrell Sponsored By Merrell

Women in the Wild

Merrell is redefining self-care by empowering and encouraging females to spend more time outside.
Learn More

Access exclusive content