H&M warns on sales after annual profit plummets

H&M reported an 88% fall in profit for the year through to November on Friday (January 29).

And the world's second-biggest fashion group warned sales will continue to be hit.

The Swedish retailer said its full-year pretax profit fell to $245 million, hurt by restrictions and lockdowns.

Profits in its final quarter fell less than expected though, helped by large cost cuts.

H&M had already reported a 10% fall in sales for the fourth quarter.

But the group's CEO Helena Helmersson said that "it is clear that when customers have the opportunity to shop – the collections are appreciated".

Sales in the first two months of its first quarter were down 23% as up to a third of H&M's around 5,000 stores were temporarily closed.

However, looking beyond the health crisis, analysts say they see some positives for H&M.

The company said due to uncertainty though, its board would come back later with a proposed date and level for resuming H&M's dividend.

Video Transcript

- H&M reported an 88% fall in profit for the year-through to November on Friday. And the world's second biggest fashion group warned sales will continue to be hit. The Swedish retailer said its full year pre-tax profit fell to $245 million, hurt by restrictions and lockdowns. Profits in its final quarter fell less than expected though, helped by large cost cuts. H&M had already reported a 10% fall in sales for the fourth quarter.

But the group's CEO Helena Helmersson said it's clear that when customers have the opportunity to shop, the collections are appreciated. Sales in the first two months of its first quarter were down 23%, as up to a third of H&M's around 5,000 stores were temporarily closed. However, looking beyond the health crisis, analysts say they see some positives for H&M. The company said due to uncertainty though, its board would come back later with a proposed date and level for resuming H&M's dividend.