H&M sales drop as second Covid-19 wave slows recovery
H&M reported a sharp drop in sales in the fourth quarter as the second wave of coronavirus restrictions curbed spending.
The world’s second-biggest fashion retailer said sales dropped 10 per cent, driven by a slowdown in the final quarter of the month.
H&M said the recovery seen in the third quarter had continued into the fourth quarter, but that sales had been hit again from the end of October as governments tightened coronavirus restrictions.
The Swedish high street giant reported that sales in the quarter fell to 52.5bn Swedish crowns from 61.7bn a year earlier.
Sales fell 22 per cent between 22 October and 30 November compared to the same period last year as the “recovery transitioned into a new slowdown as a result of the pandemic’s second wave,” H&M said in a statement.
However the local-currency drop from the beginning of September to 21 October was only three per cent compared to the previous year.
“H&M’s sales were showing good resilience prior to the latest wave of lockdowns, however they may now be affected by further restrictions on stores, such as in H&M’s largest market Germany,” RBC analyst Richard Chamberlain said in a note, Reuters reported.
Citi analysts said they viewed the overall result as encouraging and reflecting “the path of transition H&M were undertaking pre-Covid”.