H&M Struggles to Boost Sales Despite Heavy Marketing Investment

Swedish fast-fashion retailer H&M saw a mere 1% sales increase in March, after a weaker-than-expected first quarter. CEO Daniel Erver is working to revitalize the brand through marketing, with mixed results. The company's sales figures lag behind expectations, impacting profitability and stock performance.

H&M, the Swedish fast-fashion retailer, experienced only a 1% increase in sales for March following an unexpectedly weak first quarter, signaling a slow onset to its spring and summer season. Despite efforts to enhance brand appeal through increased marketing spends, returns have been sluggish, resulting in a 1% drop in shares during early trading on Thursday.

CEO Daniel Erver acknowledged the lackluster sales and earnings, but expressed optimism for future quarters. With over a year at H&M's helm, Erver aims to rejuvenate the brand using strategic marketing, including collaborations with pop stars such as Charli XCX, in an attempt to rival competitors like Zara and Shein.

H&M reported sales of 55.3 billion Swedish crowns ($5.52 billion) for the December to February period, a 2% rise in local currencies but below market estimates. The company's profitability was hurt by increased discounting and external negative factors, with its operating profit margin declining to 2.2% from 3.9% the previous year. Despite these challenges, Erver indicated that the impact of brand investments should lessen in the next quarter.

(With inputs from agencies.)