Sweden clothing retailer Hennes & Mauritz AB is pushing ahead with plans to reduce its number of stores as a result of a worldwide shift to online shopping. While the company did report better-than-expected results for its third quarter it said it would make changes to operations to adapt to the new business environment.

It plans to shut down at least 350 of its 5,000 outlets worldwide within the next year. The company, which is known for its fast-fashion offerings, will mainly close underperforming stores. It said it would limit the number of new store openings to about 100 for 2021.

During the height of the pandemic, the company was forced to close more than 80% of its stores worldwide. Many have reopened but 3%, or 166, remain closed.  

"The rapid changes in customer behavior have been accelerated by COVID-19. The H&M group is therefore now stepping up the pace of its transformation," the company said.

For its latest quarter ended August, H&M reported earnings of around 1.8 billion Sweden kronor ($201 million). This was lower than the 3.9 billion kronor reported over the same period last year and the 4.6 billion kroner loss reported in its second quarter. Revenue for the period dropped by around 18.7% to 51 billion kronor.

The company reported a 28% growth in online sales. The segment represented about a quarter of the company's sales for the period. Chief executive officer Helena Helmersson said its business recovery was going "better than expected" and cost controls had brought it back to profit quicker than anticipated.

The company's share price rose to a high of 167.30 kronor per share. The stock retained its gains Friday after closing the previous day 7% higher at 164.15 kronor a share.