By Dominic Chopping
STOCKHOLM--Sweden's Hennes & Mauritz AB said Friday that a strong recovery at the start of its fiscal fourth quarter was significantly slowed when the second wave of the pandemic again led to extensive new restrictions and lockdowns.
The fashion retailer said 1,800 of its stores are currently closed, representing 36% of its total, but noted shoppers continued to move online in increasing numbers.
The company posted a net profit of 2.49 billion Swedish kronor ($298.7 million) for the quarter ended Nov. 30, compared with SEK4.21 billion a year earlier. Analysts polled by FactSet had expected a profit of SEK2.61 billion.
Sales fell 15% to SEK52.55 billion in the quarter, as previously reported, with online sales increasing by 50% in local currencies in the quarter.
Net sales between Dec. 1 and Jan. 27 decreased by 23% on the year in local currencies.
"The ongoing restrictions, along with the many temporary store closures, will have a substantial negative impact on the first quarter," the company said.
H&M said its financial position remains strong and there are good prospects of a cash dividend in autumn 2021. However, since it is not currently possible to get a full overview of the consequences of the continuing pandemic, the board will come back with a proposed date and level for resuming the dividend during the year, it said.
Streamlining the invoice and payment process could free up around SEK10 billion in 2021, it added.
H&M plans to open around 100 new stores in 2021, while 350 stores are planned to close in the same period.
Write to Dominic Chopping at email@example.com
(END) Dow Jones Newswires
January 29, 2021 02:59 ET (07:59 GMT)Copyright (c) 2021 Dow Jones & Company, Inc.