H&M, the world’s second-largest listed fashion retailer, beat first-quarter operating profit expectations on Wednesday, as new CEO Daniel Erver said spring collections were well received and sales showed signs of recovery.
The Swedish group’s shares rose 12% in early trade after it posted an operating profit of 2.08 billion crowns ($196 million), up from 725 million and above the 1.43 billion expected by analysts in an LSEG poll.
After such rivals snatched market share over the last year, CEO Daniel Erver, less than two months into his role, said the company must concentrate on its core clientele.
“Where we want to be laser-focused on being a credible fashion brand is for the younger female customer,” he said in an interview with Reuters, adding that women in their 20s and 30s are “tremendously important” for H&M.
Erver took over as CEO after Helena Helmersson quit unexpectedly in January, citing the intense demands of the role she held for four years.
On Wednesday, Erver said the company’s top priority was to boost sales, in a departure, welcomed by the market and analysts, from H&M’s previous emphasis on profitability.
“That’s what has been really lacking, especially last year,” Daniel Schmidt, analyst at Danske Bank in Stockholm, said. “Since coming out of the pandemic sales have been flatlining, which has stood out compared to competitors.”
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H&M posted a quarterly operating profit of 2.08 billion crowns ($196 million), up from 725 million a year ago, and above the 1.43 billion expected by analysts in an LSEG poll. Its shares were set for their best day since June.
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