H&M: third-quarter profit hit by new logistics system
(CercleFinance.com) - Problems with new logistics systems in the US, France, Italy and Belgium negatively impacted Hennes & Mauritz's third-quarter results, the world's number 2 fashion retailer said on Thursday.
The Swedish budget fashion retailer said pre-tax profit fell to 3.1 billion Swedish kronor (about 300 million euros) in the past quarter, from 3.8 billion kronor in the same period last year.
The problems that arose during the implementation of new logistics systems in the US, France, Italy and Belgium over the spring led to extraordinary costs of around 400 million Swedish kronor in the third quarter, H&M said.
Sales in these markets fell by 8% in the past quarter.
"The new logistics systems are an essential part of our work to make our supply chain faster, more flexible and more efficient, and to continue the integration of stores and online," Chief Executive Karl-Johan Persson said in a statement.
The gross margin also disappointed, slipping to 50.3% from 51.4%.
On a brighter note, H&M said it increased its market share in most markets over the third quarter - particularly in Germany, Sweden, Eastern Europe, Russia and China.
Investors seemed to focus on the good news, as H&M's shares were jumping 12.7% this morning, largely outpacing the STOXX Europe 600 Retail index, which is up just 0.5%.
Copyright (c) 2018 CercleFinance.com. All rights reserved.
The Swedish budget fashion retailer said pre-tax profit fell to 3.1 billion Swedish kronor (about 300 million euros) in the past quarter, from 3.8 billion kronor in the same period last year.
The problems that arose during the implementation of new logistics systems in the US, France, Italy and Belgium over the spring led to extraordinary costs of around 400 million Swedish kronor in the third quarter, H&M said.
Sales in these markets fell by 8% in the past quarter.
"The new logistics systems are an essential part of our work to make our supply chain faster, more flexible and more efficient, and to continue the integration of stores and online," Chief Executive Karl-Johan Persson said in a statement.
The gross margin also disappointed, slipping to 50.3% from 51.4%.
On a brighter note, H&M said it increased its market share in most markets over the third quarter - particularly in Germany, Sweden, Eastern Europe, Russia and China.
Investors seemed to focus on the good news, as H&M's shares were jumping 12.7% this morning, largely outpacing the STOXX Europe 600 Retail index, which is up just 0.5%.
Copyright (c) 2018 CercleFinance.com. All rights reserved.