H&M shares are trading higher Thursday after the fast-fashion’s latest update stated that the first half of the year have proved disappointing. However, it added that a new, lower-priced line of goods is performing strongly - suggesting this is a route the firm will take to help reduce its stock levels.
By 1245 BST, H&M shares were 3.55% higher at SEK139.40. The stock has shown a mixed performance in recent weeks.
H&M’s 6-month update
The European fashion retailer has spoken at length about the need to improve its shopping channel experience for customers. It is continuing to improve its online systems while also develop the right fashion lines for its customers.
However, amid this backdrop, the first half of this financial year has remained tough, even more so than it had anticipated.
“As we signalled previously, it was going to be a tough first half-year,” said H&M CEO, Karl-Johan Persson, CEO.
“We went into the second quarter carrying too much stock and we still had some imbalances in the H&M assortment – something that we are gradually correcting.…total sales for the quarter were not satisfactory,” Persson added.
H&M said that group profits after tax, meanwhile fell to SEK6 billion, down from SEK8.4 billion a year earlier.
Outlook and plans
In addition to the details of its recent performance, H&M’s CEO added details on its continued plans for the future for the fashion retailer.
“We are continuing our investments in the supply chain, tech, advanced analytics and AI. There are promising indications from our pilot projects within personalisation, quantification, allocation and price setting, as well as in trend forecasting. Following on from these positive results, we are now scaling the projects up for more markets and more concepts,” Persson added.
And, H&M also said that its latest lower price line of goods, Afound, has been successful so far. In addition, the firm is continuing with its long-term plans.
“We can see that things are moving in the right direction, even though many challenges remain and there is a lot of hard work still to do…. We have a long-term approach and are optimistic about the future for the whole of the H&M group,” Persson said.