Despite being hampered in major European markets due to continuing store closures, H&M Group saw net sales grow 75 percent in local currencies in its second quarter to 46.5 billion Swedish kronor ($5.59 billion), up from 28.6 billion kronor (then $3.06 billion) in the year-ago period, or 62 percent on a constant-currency basis when accounting for the strengthening of the kronor.
Analysts polled by Refinitiv had on average forecast net sales growth of 66 percent. The full quarterly sales number showed significant strength compared to the start of the period, when sales from March 1-13 increased by 10 percent, and was a major bounce back from first-quarter sales declines of 27 percent.
While the second quarter is still 19 percent below sales numbers in the 2019 period, when H&M took in 57.5 billion kronor ($6.86 billion), the first half of June has shown more promise, likely related to pent-up apparel demand.
Sales from June 1-13 increased by 35 percent in local currencies compared with the same period in 2020, the fast fashion retailer said, and are up 2 percent on a two-year basis.
Their company didn’t specifically break out online sales, but said in a statement they have “continued to develop very well, even as the stores have opened.”
H&M will report a more detailed version of the results for the first six months of 2021, including second-quarter statistics, on July 1.
At the start of the second quarter, approximately 1,300 of the retailer’s 5,000 stores were still temporarily closed due to lockdowns, while open stores have had restrictions on opening hours and number of customers in the store.
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In France and Germany, the stores were closed continuously throughout the quarter as a consequence of the extended restrictions. By the end of the quarter, most of H&M’s markets still had Covid-19 restrictions in place, resulting in reduced footfall and 140 temporary store closures.
As of June 13, the number of temporarily closed stores rose to 180, largely due to all 50 stores in Malaysia having to close at the beginning of the month.
The provisional report from H&M comes a week after rival Inditex posted a strong first quarter as well. Sales in the period jumped 50 percent to 4.94 billion euros ($6.03 billion) from 3.30 billion euros ($4.03 billion) in the comparable year-ago period. Inditex said digital sales in local currencies rose by 67 percent.
The Zara owner said store and online sales in local currencies from May 1-June 6, when restrictions trimmed business hours by 10 percent, grew 102 percent year over year compared with the same 2020 period, and was up 5 percent versus the comparable 2019 period.
While H&M waits to post its official earnings, the fast-fashion retailer is clearly making inroads in new ways to expand its business.
The retailer recently furthered its investment in Swedish resale platform Sellpy, allowing the online retailer to launch in 20 additional European markets. And its philanthropic arm, the H&M Foundation, created the “Billion Dollar Collection,” a virtual fashion collection featuring 10 startups showcasing their innovative designs, from novel biomaterials to traceability technologies. Each offering includes a price tag ranging from $60,000 to $120 million that represents the estimated funding its company believes it requires to scale up the technology.
In May, H&M launched Blank Staples Wholesale, a program that allows shoppers to purchase its premium quality basic range of streetwear in bulk. The program is geared to creatives and entrepreneurs looking for a blank canvas to showcase their personal designs or rep their business ventures.