Clothing retailer H&M saw sales rise in its latest quarter, while also posting a surprise profit.
The Swedish fast-fashion chain announced in a Thursday (March 30) earnings release that its sales rose 12% for the three months between December and February.
It’s a trend H&M CEO Helena Helmersson attributed to a number of factors, according the release.
“Thanks to our investments in areas such as tech, AI and the supply chain, we have improved precision and faster response times — giving our customers access to an even wider and more relevant assortment that is adjusted to regions, stores and online,” she said. “This can be seen most clearly within H&M womenswear, which is attracting more and more customers.”
The company reported a profit of 725 million Swedish krona (about $70 million), per the release.
As PYMNTS noted earlier this month when H&M issued early sales figures, analysts had expected the company to report a loss for the quarter. H&M’S stock was up 19% Thursday morning — the highest rise in two decades — following the news.
In addition to the investments cited by Helmersson, the CEO said the company is also seeing growth from its portfolio brands, such as Arket, which has tripled sales since 2019, the release stated.
It also plans to consolidate the secondhand clothing platform Sellpy — which it began investing in 10 years ago — into a company, “which visualizes its value and generates a remeasurement effect of around SEK 1 billion in the quarter,” said Helmerrson in the release.
“In announcing the H&M Pre-Loved resale shop powered by thredUP’s Resale-as-a-Service model… H&M is responding in part to growing sustainability concerns around fast-fashion’s environmental impact,” PYMNTS wrote March 14.
Meanwhile, H&M has been in heavy competition with other brands of late, particularly in the fast-fashion space, where it faces pressure from Zara owner Inditex, which reported yearly earnings that showed sales rising by 18% from 2021 to 2022.
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