Low consumption and high purchase cost

Low consumption and high purchase cost

Swedish fashion group H&M is fighting the effects of inflation. He is also troubled by customers’ low desire to consume.

Fashion conglomerate Haines & Mauritz (H&M) got off to a better start in September after a weak third quarter. On Thursday in Stockholm, the group announced that the new Autumn collection has been well received by customers and that sales in the respective national currencies from September 1 to September 27 were up seven percent compared to the previous year. Still, prospects are very negative for the coming months, as purchase costs continue to rise as the dollar advances.

H&M therefore wants to reduce costs. The first impact of the programme, which aims to save about two billion Swedish crowns (183 million euros) annually, is not expected until the second half of 2023.

Russia’s withdrawal puts pressure on numbers

In the third trading quarter (up to the end of August), things turned out to be worse than expected for Sweden. At 49 per cent, gross margin was lower than expected, compared to 53.2 per cent a year ago.

The reason for the decline was higher raw material prices and freight costs. Adjusted operating profit also collapsed: At 3.01 billion Swedish crowns, it fell more than half and was less than the 4.34 billion expected by analysts.

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