H&M group has reported a drop in sales by 23% to SEK83.61bn (£7.07 bn) for the March-May quarter due to the Coronavirus pandemic.
Earlier this month, the Swedish retail giant issued its second quarter sales figures, although yesterday it explained the impact of reduced sales on the company.
Trading and sales were faster than expected, however they have still been significantly low during June and the retailer expects discounts to continue throughout the third quarter.
Net sales for the entire half to 31 May fell by 23% to SEK 83.61 billion (£7.07 billion) and the loss after financial items was SEK 3.97 billion (£340 million) while post-tax loss was SEK 3.06 billion (£260 million).
For its second quarter, H&M reported sales at SEK 28.66 billion (£2.42 billion), a great 50% drop from the SEK 57.47 billion it had seen in the same 2019 period, with lockdown measures around the world causing 80% of stores to temporarily close by mid-April.
Although, quarterly online sales increased by 36% as a result of the pandemic.
Quarterly gross profit was SEK 13.28 billion (£1.12 billion), with a gross margin of 46.3%, down from 55.4%.
Resulting in the loss after financial items at SEK 6.48 billion (£550 million) and after-tax loss was SEK 4.99 billion (£420 million).
Despite this, H&M said its liquidity remain in a stable position.
From 31 May, cash and cash equivalents equalled to SEK 12.7 billion (£1.07 billion) and with undrawn credit facilities added in, cash available amounted to SEK 31.24 billion (£2.64 billion).
In terms of its most recent sales, H&M highlighted for the current quarter up to 24 June, sales improved with a 25% drop in local currencies year-on-year, in comparison to the 50% cent fall it reported in the second quarter.
H&M said: “As the pandemic has speeded up the digital shift in the industry, the company’s transformation work relating to digitalisation, the supply chain and the organisation is being accelerated.”
Group chief executive Helena Helmersson said: “Before the pandemic hit, we performed strongly – a result of many years of long-term investments to meet the digital shift in the industry.”
“This, combined with the fact that we have acted quickly to counter the negative effects of Covid-19 and that we are speeding up the transformation of the H&M Group, makes me convinced that we will come out of the current crisis stronger.”
“During the pandemic it became clear how important it is that the digital and physical channels interact to meet customers’ needs.”
“When the majority of the stores were temporarily closed, we focused on redirecting product flow to our digital channels, which remained open at all times in nearly all our online markets. The positive development of online sales has continued since we began reopening our stores.”
Helmersson also noted that H&M’s recovery speed varied between markets as local restrictions differ.
She added: “Since there is an oversupply of spring products throughout the industry, and the market remains weakened, we expect markdowns in relation to sales to increase again in the third quarter.”
“We are continuing to adjust costs to mitigate the negative impact of the Covid-19 situation.”
H&M stores have been gradually opening as lockdown measures around the globe ease, with only 7% of its store estate, which is almost 350 of it locations still closed, and 48 of its 51 online markets open.