Hennes & Mauritz AB is finally on track to reach pre-pandemic sales numbers. At top fast fashion rival Inditex, third-quarter sales climbed 10 percent over 2019.
On a constant-currency basis, H&M said its fourth quarter net sales will increase 8 percent to 56.8 billion Swedish krona ($6.2 billion) year over year. Sales for the September-through-November period fell in line with the average forecast of a Refinitiv poll of Wall Street analysts. H&M did not report income or earnings levels for the quarter.
The Zara parent reported stronger constant-currency sales growth of 21 percent year over year for the August-to-October period across all brands.
Inditex, which just approved both a new CEO and a new chairwoman for 2022, is prepping an even bigger fourth quarter. Combined store and online sales in the period so far, when calculating data from Nov. 1 to Dec. 10, have increased as much as 33 percent against the year-ago period. On a two-year basis, the company says it has maintained the same 10 percent increase against 2019 that was seen in the third quarter.
What’s more promising for Inditex is that the constancy-currency sales growth exceeded 2019 third quarter sales levels with 11 percent fewer stores. For the nine months to Oct. 30, online sales increased 28 percent year over year, while they jumped 124 percent over 2019 levels.
Inditex also said that third quarter sales, profit before tax and net income reached “historic highs” resulting in operating leverage versus the 2019 period. H&M Group, which also owns Weekday, & Other Stories, Arket and Afound, did not preview its fourth quarter income or earnings totals.
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For the full-year, H&M expects 2021 net sales to jump 6 percent to 199 billion krona ($21.8 billion). Inditex did not give full-year sales expectations.
“The H&M Group’s strong recovery continues,” the company said in a statement. “Customers are showing that they appreciate the collections and being able to shop where, when and how they choose.”
In local currencies, net sales increased by 11 percent on a year-over-year in the fourth quarter. For the 2021 financial year, net sales increased by 12 percent in local currencies.
H&M’s sales totals are provisional and may deviate slightly from the full-year report, the fast fashion retailer said. The full report covering the period from Dec. 1, 2020 to Nov. 30, 2021, will be published on Jan. 28, 2022.
Inditex, on the other hand, did break out nine-months-to-date numbers. Net sales from February to October reached 19.3 billion euros ($21.7 billion), 37 percent higher than 2020 totals. Sales in constant-currency increased 39 percent. Net income increased 273 percent to 2.5 billion euros ($2.8 billion) on 59 percent gross margin.
Given its global stature, H&M Group has still battled store closures. To start the fourth quarter, around 100 stores were temporarily closed, mainly in Southeast Asia. But the end of the quarter, that number jumped to approximately 115, mostly in Austria and Slovakia.
And while Inditex and its slew of brands including Pull&Bear, Massimo Dutti and Stradivarius have had to deal with repeated store closures as well, all of the company’s 6,657 stores are now open.
H&M’s report comes after the fast-fashion retailer recently unveiled a new circular design tool, Circulator, to help meet its ambition to have all its products designed for circularity by 2025, and revealed plans to open source the platform to the industry in the future.
And the Zara owner is almost done with its own technological upgrade. Company migration to the Inditex Open Platform (IOP) is close to 97 percent complete, up from 80 percent in March. The modular platform is part of the company’s long-term initiative to deploy integrated stock management capabilities across all channels, allowing all areas of the company to adapt their processes for customer demands in real time and react to their preferences.