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H&M shares rise as fashion retailer’s online, logistics investment pay off

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H&M shares are higher Monday, as the Swedish fast fashion retailer said sales in its third quarter rose 9%. It added that its new plans and investment into expanding its online offerings and an improved logistics system, appeared to be paying off for the brand.

By around 1320 BST, H&M share were 16.01% higher at SEK142.88. The stock has been lower-to-steady in recent weeks.

H&M 3Q sales details

H&M reported earlier Monday, that third quarter sales included VAT, grew 9% to SEK64.8 billion compared with the same period a year earlier.  The rise came as the company’s investment in its online and logistics systems is beginning to bear fruit.

Sales excluding VAT, grew to SEK55.8 billion, during the same period, H&M said.

The decision to expand its digital offerings, cut prices and reform its delivery and stock handling systems came as the fast fashion business began losing out to its competitors, including Primark and Inditex owned, Zara.

And, although H&M’s transition is still ongoing and not yet complete, the initial changes are beginning to bear fruit – in some markets at least.

“The H&M group’s continuous transition, to face the major shift within the industry, has contributed to a gradually improved sales development and increased market share in many markets in the third quarter,” H&M CEO, Karl-Johan Persson, said in a press release.

New systems still being implemented

However, while there are signs that the company’s new online process and logistics systems are working out well for the fashion retailer, it’s not all plain sailing.

H&M said that there were some notable cost and sales implications, with regards to the implementation of the new logistics system in particular, that affected its bigger markets. They include:

  • The US.
  • France.
  • Italy.
  • Belgium.

“Sales and cost development … were in the third quarter considerably affected by the issues that emerged during the implementation of new logistics systems in the spring,” Persson said.

“The new logistics systems enable a faster and more efficient supply chain as well as a continued integration of store and online,” the CEO added.                                                                        

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