H&M Stops Publishing Monthly Same-Store Sales Amid ExpansionVeronica Ek and Niklas Magnusson
Hennes & Mauritz AB, Europe’s second-biggest clothing retailer, will no longer include same-store sales data in its monthly revenue updates as its store network becomes more complex because of its expansion.
The company will continue to publish the change in total sales, which it feels is “the most relevant number,” Nils Vinge, head of investor relations at H&M in Stockholm, said by telephone today. The retailer’s rapid expansion, including online, makes the base for calculating comparable store sales “more complex,” Vinge said.
The change “could be the first step in the like-for-like measures stopping to be the be-all and end-all of measuring a company’s performance as online takes off,” said Chris Chaviaras, an analyst at Barclays Plc in London.
“Every company defines LFLs differently anyway, making comparisons difficult,” Chaviaras said. “Even so, it’s not going to completely disappear any time soon and remains important for most companies for now.”
H&M today said total sales in December rose 10 percent, beating the 9.1 percent average estimate in an SME Direkt survey of analysts. The gain implies unchanged same-store sales, according to analysts at Exane BNP Paribas. The average estimate in SME Direkt’s survey was for a decline of 0.7 percent on that basis.
H&M rose as much as 2.6 percent in Stockholm trading and was up 2.3 percent at 290.5 kronor as of 10:06 a.m.
Total store numbers rose to 3,176 at the end of December from 2,809 a year earlier. The company plans to increase the number of shops by 10 to 15 percent a year “with continued high profitability, while at the same time increasing sales in comparable units,” according to its third-quarter report.
H&M plans to enter the South African market in 2015 at the earliest, after opening its first stores in countries such as Chile, Serbia and Lithuania last year as well as a franchise in Indonesia. The Swedish company currently has stores in 53 countries worldwide. It also started an online store in the U.S. in August after previous delays and has said it will add several new e-commerce markets during the next two years.
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