H&M, the world’s second-biggest fashion retailer, said on Tuesday that local-currency sales fell 10% in its fourth quarter, with a pronounced slowdown in the final month as the second wave of coronavirus restrictions curbed spending.
The Swedish rival to Zara owner Inditex said a recovery seen in the previous quarter had continued through much of the fourth quarter but that sales had been hit again from the end of October.
“Between 22 October and 30 November sales decreased by 22 percent compared with the corresponding 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.
H&M said sales in the quarter fell to 52.5 billion Swedish crowns ($6.25 billion) from 61.7 billion a year earlier, although the local-currency drop from the beginning of September to Oct. 21 was only 3% versus a year earlier.
“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.
Citi analysts said they viewed the overall result as encouraging and reflecting “the path of transition H&M were undertaking pre-Covid”.
H&M issues its full fourth quarter report on January 29.
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