H&M is now the first major Swedish company to release interim figures since the war in Iran broke out a couple of weeks ago. The company, which in recent years has had to deal with everything from a pandemic to the Ukraine war and an inflation shock, is now faced with a new challenge.
"The direct impact is relatively small, given that we have three percent of our stores in the Middle East, but we have had to close stores for short periods because it was too unsafe for employees and customers," says Ervér.
Could be affected
In a prolonged scenario, the company could be affected, he points out, including higher shipping prices but above all the economic situation for consumers.
"If energy prices increase, transportation prices will also rise, and inflation will likely increase, which in turn affects our customers."
Daniel Ervér took over as CEO at the beginning of 2024. It has now been two years of global economic uncertainty. Despite that, the world economy has proven to be surprisingly resilient, he points out.
"The world economy has proven to be quite resilient to these types of shocks. Tariffs had a smaller impact than we might have thought and we are cautious about viewing everything as gloomy. Energy prices are an important part of household budgets. If they go up significantly, it will affect consumers' purchasing power."
A sale period
H&M's figures for the first quarter, traditionally the weakest of the year, now show a profit above market expectations. However, sales were worse than expected.
In an update for March, the company announced that it expects "only" a one percent increase in local currencies compared to the previous year. This is at a time when, for example, Spanish competitor Inditex with the Zara chain has reported strong sales growth.
"It's our smallest quarter and a sale period, but we had higher expectations for sales and that they would increase more, so we're not satisfied with that," says Ervér.
The market shared that view. After falling sharply immediately after the report was released, the stock yo-yoed during the day and closed down 2.2 percent.
