H&M to stop reporting on monthly figures after a decade

H&M has posted its very last monthly sales report in June. From now on, the Swedish fast-fashion giant will not issue monthly sales reports, breaking with a 10-year long tradition.

"A month is far too short a period over which to assess how sales are developing," H&M said in a statement. "Instead, sales development should be viewed over a longer period of time, such as over a season or a quarter."

The company said it would no longer publish monthly sales data, and instead report quarterly data ahead of its interim reports to align itself more with how other fashion retailers report sales figures.

”A month is too short a period to assess sales development” at H&M

"The reasoning is that a month is far too short a period over which to assess how sales are developing; in fact, a single month's sales can actually be misleading, since calendar and weather effects--among other things--may significantly affect the outcome," it said.

This is not the first time H&M changes its reporting, pushed by an increasing competition from main rival Zara or other players including Forever21 or Mango. In fact, H&M dropped like-for-like figures from its monthly releases in 2014.

"Instead sales development should be viewed over a longer period of time, such as over a season or a quarter. This is also the reason why the majority of companies in fashion retail currently report their sales quarterly rather than monthly."

H&M’s decision welcome by shareholders, raises some questions amongst analysts

Market sources quoted by ‘Money Control’ point out that this decision might respond to the retailer’s frustration due to how the market seems to have lost confidence in the company. “The fundamental problem is not monthly data, it's the company's weak development,” same sources said, further adding that "Monthly data was not a problem when the company performed well. Why should it be now?"

In this regard, it’s worth recalling that H&M shares have been down since 2015, underperforming the market and falling short from Zara’s owner Inditex’ stock. H&M shares lost 18 percent of their value in the past year alone.

To make it up for the cancellation of monthly sales updates, the company announced it would begin to hold capital markets days (what they haven’t done since the firm’s listing in 1974) to provide "more in-depth information about the business".

To date, reactions to the re-enactment of these dates have been positive, with the company’s leading shareholder, pension fund AMF, welcoming the plans for capital market days. Anders Oscarsson, head of ownership at AMF, pointed out that dropping monthly sales publications was fine, adding that the fund remained a long-term investor in H&M.

Image:H&M UK Web