H&M April sales up 7% but store count is 11% higher
H&M is well known for giving little away in its sales results announcements. And so it was on Monday as the Swedish fashion giant reported that group sales including VAT rose by 7% in local currencies during April compared to the same month in 2016. The figure matched its expectations.
However, it did say that it had 4,474 stores in total this April compared to 4,035 last year. That’s nearly 11% more trading locations, suggesting that the 7% sales rise isn’t as good as it appears on the surface.
That said, the firm’s shares have edged upwards in Monday morning trading and are actually SEK5 higher than last week’s mid-week dip. But they remain well off the highs the firm reached in 2015.
The company, which is preparing to launch its latest chain, Arket, on London’s Regent Street and in Copenhagen, gave no details of how sales broke down across H&M, Cos, & Other Stories and its other labels.
The company continues to expand fast and last week’s main news was that it opened it biggest UK store, at Westfield Stratford, with a greater focus on menswear and homewares than it usually offers. It had upgraded its existing store at the mall after strong sales there.
But it is clearly not seeing the sales results it wants everywhere. April was the second month of H&M’s Q2 and its sales report followed what was an undeniably weak March. Its sales in that month had fallen short of earlier estimates with only a 6% increase.
Analysts haven’t yet commented on the April figure but did say that March was a sign of tough times for fashion retailers. Yet March was at least better than February when sales actually fell for the first time in four years.
The company has a full-year growth target of between 10% and 15% and its CEO has previously said this could be a hard target to reach given current sales trends.
Some analysts have speculated that the firm should slow down its aggressive expansion programme and focus on squeezing more sale out of existing locations.
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