Swedish fashion retailer H&M has reported a 3% drop in net sales in the third quarter (Q3) of fiscal 2024 (FY24) to Skr59.01bn ($5.8bn), down from Skr60.89bn in the corresponding quarter of the previous fiscal year.
The retailer’s gross profit also saw a reduction, falling to Skr30.13bn in Q3 FY24, compared to Skr31.01bn in Q3 FY23.
Despite the decline, H&M's gross margin improved slightly to 51.1% during the quarter, up from 50.9% in the previous year.
The retailer reported an operating profit of Skr3.50bn in Q3 FY24, a decrease from Skr4.739bn in the same quarter of the previous year, resulting in an operating margin of 5.9%, down from 7.8%.
H&M's selling and administrative expenses increased by 1% to Skr26.60bn, compared to Skr26.27bn in Q3 FY23.
During the nine months to 31 August 2024, H&M's net sales were down by 1% to Skr172.28bn from Skr173.38bn in the same period of FY23.
However, the gross profit for this period increased to Skr91.357bn, up from Skr 87.239bn, corresponding to a gross margin of 53.0%, compared to 50.3%.
The company's operating profit for the same nine months increased to Skr12.682bn, up from Skr10.20bn in the same period of the previous fiscal year.
Its operating margin for the period was 7.4%, an improvement from 5.9%.
Despite the overall decline in the third quarter, H&M's autumn collection 2024 has been well-received, with sales in September expected to increase by 11% in local currencies compared to the same month in 2023.
The retailer has also launched several initiatives, including upgrades to physical stores and a new digital experience.
H&M opened its first flagship store for H&M Beauty in Sweden in September 2024, and announced the upcoming openings of digital stores on Douyin and Pinduoduo, two of China's largest e-commerce platforms.
The first H&M store in Brazil is set to open in São Paulo at the end of 2025.
H&M CEO Daniel Ervér said: "Despite a challenging start, we are concluding the third quarter with sales on par with last year in local currencies and with good cost control. We are strengthening the H&M brand by investing in products, the shopping experience, and marketing, which we are already seeing start to make an impact and which will contribute to increased sales and profitability."
In September 2024, H&M announced plans to unveil a new pop-up store in the Birger Jarlspassagen, Bibliotekstan, Sweden.
