H&M Sales Rise 21% as It Rushes to Open 400 Stores by Year's End

On the down side, a strengthening U.S. dollar drove up costs for the Swedish retailer in the second quarter.
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Lauren Indvik
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On the down side, a strengthening U.S. dollar drove up costs for the Swedish retailer in the second quarter.
Crown Princess Victoria of Sweden and her husband, Prince Daniel of Sweden. Photo: Ian Gavan/Getty Images Entertainment

Crown Princess Victoria of Sweden and her husband, Prince Daniel of Sweden. Photo: Ian Gavan/Getty Images Entertainment

Earlier this month, Crown Princess Victoria of Sweden made headlines when she opted to wear an H&M gown to the wedding of her brother, Prince Carl Philip of Sweden, to former reality TV star Sofia Hellqvist. It was a very public display of support for one of Sweden's most internationally successful brands, which is also the second largest apparel maker in the world, behind Zara parent company Inditex.

H&M has been on a growth tear over the past several years, opening more than one store per day on average since 2013. (It plans to open 400 stores this year alone.) The company has also gone a long way towards cleaning up its image, making a very public display of its sustainability efforts and launching "eco-friendly" fashion collections, from which the gown above was drawn. 

From a sales perspective, all of that is working pretty well. On Thursday, the company — which besides H&M, owns Cos, & Other Stories, Weekday, Monki and Cheap Monday — released its second-quarter sales figures. In the three months ending May 31, sales rose 21 percent to 45.9 billion kronor ($5.6 billion) excluding VAT (value-added tax). Profit after tax amounted to 6.5 billion kronor ($790 million), up 11 percent.

So far this year, the company has opened its first stores in Lima, Peru ("one of our strongest [openings] ever when it comes to sales," the company said) and Macau. Its first stores in India (in New Delhi) and South Africa (Cape Town) will open before the end of the year.

Online has seen an equally aggressive push. H&M launched e-commerce in the U.S. less than two years ago — late by any standard — but today is in 21 markets. Poland, Portugal, Romania, the Czech Republic, Bulgaria, Slovakia, Hungary and Belgium all got online shopping this year; Switzerland will bring the total number to 22 come fall. H&M said it is working to bridge the gap between its offline and online experiences as "customers' increasingly digital world... [have made] the boundary between shopping online and in physical stores... more and more seamless."

Also of note: H&M's beauty range — encompassing makeup, hair care and body care — will launch next month in 900 H&M stores across 40 markets, as well as online.

All of that said, this last quarter has not been without its challenges. An increasing strong U.S. dollar has driven up purchasing costs — ranging from raw materials to transportation — and unusually cold spring weather in much of Europe meant that spring sales were not as strong as they could have been. But all of that did little to halt overall momentum.