Swedish fashion giant H&M has reported a jump in profit in the third quarter, but said recent sales have been hurt by unusually warm September weather across key markets.
The group, which owns its namesake label along with Cos, Monki, and Weekday, among others, made a net profit of SEK 3.3 billion (285.1 million euros) in the quarter ended August 31, up from SEK 531 million (45.6 million euros) the prior year.
This included a significant one-off cost relating to the winding down of its operations in Russia.
Meanwhile, sales in the third quarter rose 6 percent to SEK 60.9 billion (5.2 billion euros) - though they remained flat at constant currencies.
“During the quarter the focus has been on profitability and inventory efficiency, resulting in strong cash flow and good profit development,” CEO Helena Helmersson commented on the results.
She said the third quarter started strongly thanks to pent-up demand for summer fashion following a cold May in most of its markets. However, that demand gradually decreased through the summer.
She said there was a weaker end to Q3 as comparative figures were impacted by the temporary reopening in Russia in August last year.
September sales hurt by hot weather
Looking at more recent trading, unusually hot weather in many of the group’s European markets in September has delayed the start of the Autumn season.
Sales during September are expected to fall by 10 percent in local currencies.
Looking at the first nine-months of the year, net sales at the group rose 8 percent to SEK 173.4 billion (around 14.9 billion euros), though they remained flat on a constant currency basis.
Net profit jumped to SEK 7.1 billion (614.1 million euros) from SEK 4.4 billion (380.7 million euros).