By Marie Mannes and Helen Reid
STOCKHOLM (Reuters) -H&M, the world’s second-largest listed style retailer, beat first-quarter working revenue expectations on Wednesday, as new CEO Daniel Erver stated spring collections had been properly acquired and gross sales confirmed indicators of restoration.
The Swedish group’s shares rose 12% in early commerce after it posted an working revenue of two.08 billion crowns ($196 million), up from 725 million and above the 1.43 billion anticipated by analysts in an LSEG ballot.
The two% first-quarter fall in gross sales was lower than analysts anticipated, and gross sales at the beginning of its second quarter rose by 2%, reflecting stronger demand for its clothes and accessories.
“The quarter’s gross sales step by step improved throughout February with well-received spring collections, which is a constructive signal that we’re heading in the right direction,” stated CEO Daniel Erver, who has been within the function for 2 months.
“Our prime precedence is to strengthen gross sales,” he added, additionally reiterating H&M (ST:)’s objective of reaching a ten% working revenue margin this yr.
The retailer, identified for $19.99 denims and attire below $15, has been stretching into dearer clothes, promoting leather-based trousers for greater than $300 and, below its Cos model, coats for as a lot as $1,190.
On-line fast-fashion retailer Shein, which sells $8 attire, $5 t-shirts and $2 jewelry items, has eaten into H&M’s share of the decrease finish of the market, whereas greater rival Zara has prolonged its dominance within the sector.
In an effort to enhance the in-store expertise, H&M stated it’s refurbishing round 250 shops this yr, a “important enhance” in comparison with final yr. It plans to open round 100 shops, primarily in progress markets, and shut 160 shops in additional established markets.