Fashion retailer H&M has said its sales grew for a fourth straight quarter, but also hinted it had needed to invest more to boost its online business, disappointing investors already concerned about margin pressure.
H&M, the world’s second-biggest fashion retailer, has seen profits shrink and inventories rise in recent years as its core brand has not kept up with the online shift and tougher competition, and not reacted fast enough to demand swings.
While investing heavily in logistics, digital technology and store concepts, and reviewing its mix of stores and brands, H&M keeps struggling to convince investors it is back on track and its shares remain little above the 13-year lows seen in 2018.
The group, whose main rival is market leader and Massimo Dutti/Zara-owner Inditex, said that local currency sales grew 6% in its fiscal second quarter, the three months to the end of May, from a year earlier, matching analyst expectations.
“The rapid changes in the fashion industry continue and we can see that our own transformation work is taking us in the right direction, although hard work and many challenges still remain,” it said.
“As customer satisfaction and sales increase, we have intensified our transformation work even further,” it said.
Shares in H&M were down nearly 5%, partly because investors took its comments to mean it had had to spend more to transform its business. H&M said second quarter net sales excluding Vat were up 11% at 57.5 billion crowns (€5.4bn), just beating expectations.