H&M reinstates dividend as sales recovery continues

Hennes & Mauritz is to reinstate its dividend, the fashion retailer said on Thursday, as sales and profits continued to improve from the worst of the pandemic.

The Swedish chain saw net sales jump 14% year-on-year in the three months to 31 August, to SEK 55.6bn. (£4.7bn). Gross profits improved 19% to SEK 29.6bn, while operating profits rose to SEK 6.3bn from SEK 2.7bn a year previously.

The clothes retailer - the second-largest after Spain’s Inditex - said store sales had started to recover as restrictions were eased across markets. At the start of the third quarter, 180 of the group’s stores were closed by lockdown restrictions, reduced to 100 by the end of the period.

Online sales also grew during the quarter, by 22% in local currencies, or by 17% when converted to krona.

Chief executive Helena Helmersson said: "The increase in profit shows that the strong recovery is continuing, despite sales being partly affected by restrictions and delays associated with the pandemic.

"The results are explained by much-appreciated collections, lower markdowns and good cost control combined with the initiatives implemented in areas such as tech and the supply chain.

"With our continued transformation and our well-positioned and sustainable fashion…we are optimistic we will see long-term, profitable and sustainable growth for the H&M group."

H&M suspended its dividend at the start of the pandemic. But it confirmed it would be now reinstated following the strong third-quarter numbers.

Chair Karl-Johan Persson, the grandson of H&M’s founder and the group’s former chief executive, said: "The board now considers that the H&M group’s improved profitability, strong financial position and the stabilised market conditions, combined with our ability to manage the impact of the pandemic on our business, makes a dividend possible."

The board is proposing a dividend of SEK 6.50 per share, to be paid in November.

H&M, which was founded in 1947, has around 4,850 stores worldwide. Along with its flagship H&M brand, other chains include Cos, & Other Stories and Weekday. The founding family continues to hold a controlling stake in the business.

As at 1130 BST, shares in the Stockholm-listed firm were trading 2% lower.