H&M sales grow for sixth quarter


H&M has been making some progress reducing its high inventory level, which stood at 40 billion kronor at the end of June

GENEVA: Hennes & Mauritz AB’s sales gained for a sixth consecutive quarter as the Swedish retailer tries to reduce a buildup of inventory and end a three-year slump in earnings.

Sales rose 12% to 62.6 billion Swedish kronor (US$6.5bil) in the three months through August.

Analysts expected 62.2 billion kronor.

H&M has been making some progress reducing its high inventory level, which stood at 40 billion kronor at the end of June.

The retailer said its summer collections were well-received and it managed to increase market share.

The big question is whether that will fuel earnings when H&M issues a full report on Oct 3.

The sales increase of 8% in local currencies shows that part of the revenue growth is coming from foreign-exchange moves.

However, a weaker krona makes it more expensive to source goods from Asia, which could cut into profitability.

H&M has struggled in recent years as its clothes fell out of favor with shoppers and it launched a plethora of new formats.

H&M has recently slashed prices to as low as US$5.99 for skinny jeans and US$17.99 for a dress with a belt.

Rival Inditex SA this month reported an acceleration in sales, while Primark announced a drop in like-for-like revenue.Market Reaction

The stock has advanced 51% this year.

H&M’s stock can be volatile because short sellers have bet against about a sixth of the company’s freely traded shares, according to IHS Markit data. — Bloomberg


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