H&M’s Sept sales hit by supply delays after profit tops pre-pandemic level

STOCKHOLM, Sept 30 (Reuters) – Provide disruptions hampered H&M’s gross sales in September, the Swedish retailer stated on Thursday, after its June-August revenue surpassed expectations and pre-pandemic ranges.

Disruptions to the worldwide economic system throughout the pandemic have upset international provide chains, resulting in shortages of products in addition to containers, storage and drivers for the transportation of products, and inflicting a spike in delivery prices.

“Gross sales in September 2021 had been barely greater than within the corresponding month the earlier 12 months in native currencies, despite the fact that demand was not capable of be totally met due to disruption and delays in product stream,” H&M stated.

Chief Government Helena Helmersson instructed analysts and media bottlenecks affecting H&M had been primarily in manufacturing, transport and ports. She stated the state of affairs was now enhancing on the provider finish however that H&M was bracing for extra delays in deliveries within the present quarter.

Fiscal third-quarter pretax revenue on the world’s second-biggest trend retailer jumped 158% from a 12 months earlier to six.09 billion Swedish crowns. Analysts polled by Refinitiv had on common forecast a 5.05 billion crown revenue.

In comparison with the identical quarter in 2019, earlier than the pandemic, revenue was up 22%.

“The H&M group’s enhance in revenue for the quarter is especially a results of well-received collections with extra full-price gross sales, decrease markdowns and good price management,” Chief Government Helena Helmersson stated in an announcement.

H&M stated round 50 of its 5,000 shops remained briefly closed at present, in opposition to 180 firstly of June. On the peak of the COVID-19 pandemic, most shops had been closed attributable to lockdowns and restrictions.

H&M stated an advantageous U.S. greenback alternate fee had in its third quarter offset considerably greater costs for delivery and uncooked supplies, however warned:

“Because the constructive U.S. greenback impact subsides and the excessive delivery and uncooked supplies costs stay, the general market state of affairs for buying prices within the fourth quarter will steadily grow to be much less constructive.”

Costs for cotton are rising on sturdy Chinese language demand and unfavourable climate in key rising areas.

The group proposed paying a dividend for 2020 of 6.50 crowns per share in November. It had stated in July that prospects of paying a dividend within the autumn had been excellent, after it didn’t suggest one at its annual normal assembly in Might.

H&M’s shares had been roughly unchanged at 0915 GMT.

Market chief Inditex , the proprietor of Zara, earlier this month additionally reported quarterly income above pre-pandemic ranges.

Helmerssom instructed analysts and media its state of affairs remained advanced in China, the place the group is struggling a backlash over feedback made in 2019 about employees’ rights within the Xinjiang province.

Reporting by Anna Ringstrom, extra reporting by Helena Soderpalm; enhancing by Elaine Hardcastle and Jason Neely

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