Salem Radio Network News Wednesday, February 1, 2023

Business

H&M June-August profits dive as Russia exit stings

STOCKHOLM (Reuters) -H&M, the world’s second-biggest fashion retailer, reported on Thursday a much smaller-than-expected June-August pretax profit amid cost inflation, slowing consumer spending and one-off expenses related to its exit from Russia.

Pretax profit in the period, the Swedish group’s fiscal third quarter, fell to 689 million crowns ($60.9 million) from a year-earlier 6.09 billion. Five analysts polled by Refinitiv on average forecast a 2.98 billion crowns profit.

A one-time cost of 2.1 billion crowns related to the winding down of H&M’s Russian operations impacted the result, accounting for half of the decrease in profits, the company said in a statement.

H&M announced in July it was winding down its business in Russia as a result of the country’s invasion of Ukraine.

In Europe, where H&M has the bulk of business, a worsening security situation, record energy prices and high inflation are weighing on consumer confidence, and households are cutting back on shopping as they brace for tougher times.

H&M announced a cost cutting programme that it predicted would result in annual savings of around 2 billion crowns, with savings expected to become visible in the second half of 2023.

It said autumn collections had been well received, with sales up 7% year-on-year in local currencies in the period Sept. 1–27.

($1 = 11.3104 Swedish crowns)

(Reporting by Marie Mannes in Gdansk, Anna Ringstrom in Stockholm, editing by Terje Solsvik)

Previous
Next

Editorial Cartoons

View More »

Gary Varvel
Fri, Jan 27, 2023

X CLOSE