H&M swings to a net loss of £89 million in the fiscal first quarter

Hennes & Mauritz (ETR: HMSB) said on Wednesday that it swung to a net loss in the fiscal first quarter due to the Coronavirus pandemic that continues to weigh on demand.

H&M shares that you can conveniently trade online via a range of user-friendly apps opened more than 1.5% down on Wednesday and lost another 1% in the next hour. The stock is now trading at £16.51 per share. In comparison, Hennes & Mauritz had started the year 2021 at a much lower £14.23 per share.

H&M reports £3.33 billion of sales

H&M reported £89 million of net loss in the quarter that concluded on 28^th February. In the same quarter last year, it had posted £160 million of profit instead. According to FactSet, experts had forecast the clothing-retail company to post an even higher £97 million of loss in Q1.

The Swedish multinational said that it generated £3.33 billion of sales in the recent quarter that represents a 27% growth on a year over year basis. In local currencies, its net sales climbed by an even broader 55% between 1^st and 28^th March compared to the same period last year.

According to H&M, roughly 1,500 of its stores or 30% of the total, are still closed due to the COVID-19 restrictions. The ongoing health emergency has so far infected a little under 129 million people worldwide and caused more than 2.8 million deaths.

In the prior quarter (Q4), the fast-fashion clothing firm had posted a 15% decline in its sales.

Hennes & Mauritz said that its annual general meeting scheduled for May was unlikely to propose a dividend. But returns to shareholders, it expressed confidence, were expected to be resumed later this year in the autumn.

H&M commits to rebuilding trust in China

In related news, H&M committed to rebuilding trust in China that it said was a crucial market. The retailer was recently wiped from the internet in China after the Xinjiang controversy. The Stockholm-based company said:

“We want to be a responsible buyer, in China and elsewhere, and are now building forward-looking strategies and actively working on next steps with regards to material sourcing.”

H&M performed fairly downbeat in the stock market last year with an annual decline of roughly 10%. At the time of writing, it is valued at £24.16 billion and has a price to earnings ratio of 264.77.