PARIS — Hennes & Mauritz reported an 11 percent rise in sales over the second quarter, lifted by a currency boost, but flagged the need for “hard work” as it doubles down on efforts to revamp operations to match shifting consumption habits.
“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,” the company said in a statement.
The Swedish fast-fashion retailer has been investing in technology as it seeks to modernize its operations systems to keep up with fast-moving consumer tastes and shopping habits, both online and in stores. The company was caught off guard by the changes in the industry and is playing catch-up with rivals like Inditex, which is rolling out state-of-the-art logistics systems and taking internet sales to all markets.
Sales for the three months ended May 31 were 57.47 billion Swedish kronor, or $6.05 billion, representing a 6 percent rise in local currency terms.
Analysts said the performance slightly beat forecasts.
“We expect this to be well-received as it indicates H&M is continuing to execute better this year and is gaining share in major markets, albeit against easy comparisons,” said RBC Europe. Signaling wariness about future margins, the analysts added that they remain “relatively cautious on the margin outlook given likely further investments in the offer and USD sourcing headwinds.”
The company will disclose further financial details when it publishes six-month results on June 27.
Spanish rival, Inditex, the owner of Zara, last week flagged improvement in margins as executives touted momentum from investments in integrating stores and online sales systems along with a tight control over inventory. The company is focusing on beefing up full-priced sales while many competitors in the lower-priced segment have been caught up in a spiral of discounting.