Shares rally as H&M reports jump in fourth-quarter sales

Hennes & Mauritz reported a jump in fourth-quarter sales on Monday, though the timing of Black Friday meant the numbers narrowly missed analysts' expectations.

The Swedish retailer said net sales for the three months to 30 November rose by 9.0% to SEK61.7bn, or by 5.0% in local currencies.

The fashion giant said year-on-year growth in the fourth quarter had been dented by the timing of Black Friday, which this year fell a week later, just before the end of November.

“Therefore, some of the big Black Friday online sales will not be recognised until December,” it confirmed. H&M said the amount in question was expected to be around SEK500m. Adjusted for this, net fourth-quarter sales would have risen 10%.

In the year to date, net sales rose 11.0% to SEK232.8bn, or by 6.0% in local currencies.

H&M is a stalwart of the British high street, but in recent years it saw footfall decline, prompting profits to slide while inventories piled up.

It therefore embarked on a wide-ranging turnaround programme, including investing in online services, opening new stores and developing brands such as & Other Stories and Arket.

Michael Hewson, chief markets analyst at CMC Markets, called the fourth-quarter numbers “good news” for the high street. “While missing expectations slightly, [sales were] still 9% up. The company blamed the timing of Black Friday for slightly coming up short, but there does appear to be rising confidence that management are starting to put their inventory problems behind them.”

Shares in the group have already risen more than 50% this year, and by 1230 GMT were trading nearly 2% higher in Stockholm.