Sweden’s clothing-retailer H&M reported stronger-than-expected sales growth in the third quarter (Q3) on Monday as the world’s second biggest fashion company said its efforts to compete with online sellers and budget brands were bearing fruit.
H&M, whose shares had climbed 8.8 per cent by 0707 GMT, said its moves to face the shift in consumer tastes had contributed to gradually improved sales and increased share in many markets in the third quarter, reports Reuters.
But the retailer, which has more than 4,700 stores, said the introduction of a new logistics system to speed up deliveries had hit sales and raised costs in important markets such as the United States, France, Italy, and Belgium.
H&M’s local-currency sales including value added tax (VAT) in the June-August period rose 4 per cent from a year earlier, against a mean Reuters poll forecast for a 1.9 per cent increase.
Reported sales excluding VAT were up 9 per cent to 55.8 billion Swedish crowns, beating a forecast 5.5 per cent rise to 54.0 billion crowns.
H&M has seen profits shrink and inventories pile up over the past couple of years as sales slowed at its core budget brand.
It is due to publish its full fiscal third-quarter report on September 27.