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The world’s second-biggest clothing retailer, whose main rival is Zara-owner Inditex (BME:ITX), reported operating income of SEK 4.7 billion ($1 = SEK 11.04) in the June to August period, meeting analysts’ expectations. The corresponding bottom-line figure last year was dampened by charges related to H&M’s exit from Russia following the outbreak of the war in Ukraine.
Cost control measures also helped H&M’s margin grow to 7.8% during the three months. The company added that it still expects to bump this figure up to 10% by 2024.
H&M also rolled out a new share buyback program, saying it aims to repurchase up to SEK 3 billion of stock starting from Wednesday.
“The focus during the quarter has been on profitability and inventory efficiency, resulting in strong cash flow and good profit development. We are taking further steps towards our goals and creating conditions for profitable growth over time,” said Chief Executive Officer Helena Helmersson in a statement.
But H&M flagged that September sales would slip by 10% in local currencies versus the same month in 2022 due to “unusually hot weather” in several European markets, which pushed back the start of the autumn shopping season. Discontinued operations in Russia accounted for four percentage points of the decrease as well, the firm noted.
