Hennes & Mauritz Shares Surge

Shares of Hennes & Mauritz (HNNMY, HM.S, HMSB.F), the world’s second-biggest fashion retailer, surged as the firm reported a jump in sales for the fourth straight quarter, a signal that an upgrade of its logistical systems to transform the group’s supply chain is working.

Net sales rose by 11% to 57.47 billion Swedish kroner ($6.20 billion) during the three months that ended May 31, from 51.98 billion Swedish kroner a year ago, as revenue from India and Mexico soared while turnover in the US also jumped.

Online sales continued to grow “strongly,” increasing by 27%, the firm that owns the H&M brand said in its earnings statement early on Thursday.

Looking ahead, the company expects the cost of markdowns in relation to sales will drop by about 1.5 percentage points year-on-year in the fiscal third quarter.

The group is “accelerating its adaptation to customers’ shopping patterns” and has, therefore, cut the number of new stores openings “in favor of even more digital investments.” Net addition for the full-year 2019 will now be about 130 outlets, which is 45 fewer than previously planned.

Thailand, Indonesia, and Egypt will become new H&M online markets via franchise during the second half of 2019, the company noted.

“The H&M group continues to increase full-price sales, reduce markdowns and increase market share,” Chief Executive Officer Karl-Johan Persson said in the statement. “Our new online platform and our new logistics systems have not yet achieved full efficiency [as yet] but for customers [it has] resulted in improvements such as faster and more flexible deliveries.”