H&M beats earnings expectations as new CEO plots turnaround

H&M, the world’s second-largest listed fashion retailer, beat first-quarter operating profit expectations on Wednesday (Mar 27) helped by a smaller-than-expected fall in sales.

The Swedish group posted an operating profit of 2.08 billion kronor (S$264.2 million), up from 725 million and well above the 1.43 billion expected by analysts in an LSEG poll.

Sales fell by 2 per cent, better than analysts expected, while sales at the start of its second quarter rose by 2 per cent in a sign of stronger demand for its clothing and accessories.

“The quarter’s sales gradually improved during February with well-received Spring collections, which is a positive sign that we are on the right track,” said CEO Daniel Erver, who has been in the role for two months.

The challenge for Erver will be to show that H&M can boost profit while returning sales to growth.

H&M has said it aims to reach a 10 per cent operating profit margin over the course of this year.

The retailer, known for US$19.99 jeans and dresses under US$15, also sells leather trousers for more than US$300 and, under its Cos brand, coats for as much as US$1,190. REUTERS