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H&M: Profits exceed pre-pandemic levels

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Hennes and Mauritz (H&M), the Swedish clothing giant, reported Thursday quarterly profits that exceeded pre-pandemic levels by a large margin.

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From June to August, H&M posted a net profit of 4.69 billion kroner (about $540 million), compared with 1.8 billion last year. It is exceeding its pre-pandemic level of 3.86 billion in the third quarter of 2019.

Scandinavian group’s June-August net profit was 4.69 billion kroner ($540 million), against 1.8 billion last year in the same period, and is up from its pre-pandemic level (3.86 billion in the third quarter of 2019).

In contrast, sales, while up 9% year-on-year to 55.58 billion, are still below the 62.6 billion of the third quarter of 2019.

During the same period, operating margin increased 6 points to 11.3%.

“H&M’s profit increase shows that the strong recovery continues, even though sales were partially affected by restrictions and delays related to the pandemic,”. CEO Helena Helmersson said in the report.

Since March, China boycotted H&M for refusing to buy cotton from Xinjiang. The announcement came amid allegations of forced labor by Uighurs. China was H&M’s third largest domestic market before the boycott began.

However, the group did not comment on the situation in its report.

One of H&M’s biggest competitors, Zara-owner Inditex, announced in mid-September that it had turned the page on the pandemic. The company reported strong online sales and returns from customers in the first half of the year.

As a result of its results, H&M has decided to resume dividend payments, citing “significantly improved profitability, a solid financial position, and more stable market conditions”. The group suspended dividend payments due to the Covid-19 pandemic.

In November, H&M proposed a dividend of 6.50 kroner per share ($0.75 per share).

For MetaNews.

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