H&M shares soar as earnings beat expectations

June 30, 2023 | 09:00

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Shares in H&M surged on Thursday after the Swedish clothing giant reported better-than-expected earnings for its second quarter.

H&M shares soar as earnings beat expectations, source:hm.com

H&M reported a net profit of 3.29 billion kronor ($305 million) for the March-to-May period.

It was down from 3.68 billion kronor the year before but above expectations of 2.84 billion kronor in a Bloomberg survey of analysts.

H&M shares were up over 16 percent on the Stockholm stock exchange in early afternoon trading.

"The summer collections have been well received and the third quarter has got off to a good start. The conditions for increased growth as well as profitability continue to develop in a favourable direction," CEO Helena Helmersson said in a comment.

The company also reported a near five percent drop in operating profit to 4.74 billion kronor, but this was also better than analysts' expectations of 4.26 billion kronor.

H&M noted in its report that the operating profit "was negatively impacted as a result of increased raw materials and freight costs combined with a stronger US dollar compared with last year."

The company also reported a 20 percent reduction of its inventory on hand and said it was on course to further reduce its stocks of unsold clothes.

Net sales for the period rose six percent to 57.6 billion kronor, H&M said while adding that in the period of June 1 to June 27 it had seen a 10 percent increase in sales in local currencies compared to the same period a year earlier.

H&M said it planned to open around 100 new stores, while closing around 200.

At the end of May the global retailer had 4,399 stores around the world, a reduction of 303 stores compared to a year earlier.

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By AFP

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