After more than two years, global fashion retailer H&M finally reported its first quarterly profit gain. The company released its earnings report on Thursday, which showed the company's first rise in quarterly pretax profits. H&M attributed the gain from its continued efforts to adapt to rapid changes in consumer taste and the overall market.
For its June to August quarter, H&M reported a pretax profit of $507 million. This was around a 20 percent increase from its $410 million in profits from the same quarter last year. The figures managed to slightly beat initial analysts' expectations, which were pegged at around $500 million.
One of the world's largest retailers stated that it had spent quite a lot over the past two years to transform its business in an attempt to get out of its slump. Over the last two years, the company has reported continually falling profits due to slow sales and a growing inventory.
Following the release of its earnings report for the company's quarter ending in August, H&M stock prices soared by as much as 6.5 percent. The company shares are majority controlled by its founding family. The original company founder's son, Stefan Persson, serves as the firm's chairman, while his grandson, Karl-Johan Persson, serves as its President and CEO.
H&M's stock hit a 13-year low in 2018 before finally bouncing back. Since the start of this year, the company's stocks have risen by about 56 percent. However, the rise in its value still represents only half of what the company was worth back in its peak in 2015.
According to H&M CEO Karl-Johan Persson, the increase in its profits for the quarter can be attributed to the company's continued development of full-price sales and decreased markdowns. The executive also stated that the company's efforts to transform its business are on track and it will continue with its strategy moving forward.
H&M executives also stated the company is continually increasing its market shares across several regions. According to the company, its sales growth is now at its highest level in over three years, partly thanks to its popular summer offerings. H&M expects growth in its full-year profits, sentiment that is shared by most analysts.
H&M, the second-largest retailer in the world, and Inditex, the parent company of Zara and the largest retailer in the world, have both managed to weather the storm despite the rise of competitors and the popularity of online shopping. Unfortunately, their rival Forever 21 did not manage to survive and had filed for bankruptcy on just this week.
