H&M continues to struggle with weak demand in many countries and the withdrawal from Russia. In contrast, the Spanish competitor Inditex, parent company of Zara, once again reported strong sales growth this week. In the fourth business quarter, which lasted until the end of November, H&M recorded a slight increase in revenue to 62.6 billion Swedish kronor (5.6 billion euros) due to the weak Swedish currency.
Adjusted for exchange rate effects and the withdrawal from Belarus and Russia, however, it decreased by one percent. Experts from Bloomberg had already expected a decline of this magnitude. Nevertheless, the business figures were positively received on the stock market. After initial confusion, the H&M stock rose by 0.69 percent to 177.94 SEK in Stockholm on Friday.
In the current fiscal year, the stock has gained around 60 percent so far, but it is still far away from the prices above 350 Kronor from the year 2015. The Swedish fashion retailer may now have to sell off its inventory with higher discounts to make room for new collections.
In the third business quarter until the end of October, Inditex recorded lower but still significantly better growth than H&M. The Swedish fashion chain had already warned of a decline in sales in September due to the warm weather at the beginning of autumn. H&M also decided last year to reopen its stores in Russia before permanently ceasing its activities in the country due to the Russian aggression against Ukraine.
In the entire financial year, H&M increased its turnover by six percent to 236 billion kronor. However, if the business operations in Russia and Belarus, as well as currency fluctuations, are disregarded, the growth amounts to only one percent.
The Swedish fashion chain reopened its first shops in Ukraine in November after it had halted activities due to the Russian war of aggression against the country in February 2022. Despite the difficulties in some countries, H&M remains optimistic about the future and hopes for a stabilization of demand in the coming months.
