By Dominic Chopping 
 

STOCKHOLM--Sweden's Hennes & Mauritz AB said Thursday the worst of the pandemic crisis is now behind it after posting better-than-expected third-quarter earnings.

The fashion retailer said recently that well-received collections, rapid and decisive actions in response to the pandemic, more full-price sales and strong cost control had helped it recover faster than it had expected.

The company posted a net profit of 1.82 billion Swedish kronor ($202.7 million) for the quarter ended Aug. 31, compared with a profit of SEK3.86 billion a year earlier. Analysts polled by FactSet had expected a profit of SEK1.41 billion.

Sales fell 19% to SEK50.87 billion, as previously announced, while net sales in September decreased by 5% on year in local currencies compared with the year-earlier period.

H&M said rapid changes in customer behavior were accelerated by the pandemic, with a growing number of customers shopping online. This has prompted the company to further step up the pace of its transformation work, with digital investments, optimization of the store portfolio and increasingly integrated channels.

As part of this store reshuffle, H&M said that around a quarter of its stores have a contractual right to renegotiate or exit their leases each year and that it plans a net decrease of around 250 stores in 2021.

"Although the challenges are far from over, we believe that the worst is behind us and we are well placed to come out of the crisis stronger," said Chief Executive Helena Helmersson.

H&M said currently 166 of its more than 5,000 stores are still closed, compared with around 200 that were closed at the end of August.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

October 01, 2020 03:01 ET (07:01 GMT)