H&M reports $229 million in quarterly profits — 10 times higher than analysts forecast

• Swedish fashion retailer H&M on Tuesday reported around $229 million in pre-tax profit for the June to August quarter.
• Analysts had forecast a $21.8 million profit, according to Refinitiv's SmartEstimate model.
• Sales were still 19% down on the same period in 2019.

Swedish fashion giant H&M Group on Tuesday reported quarterly profits more than 10 times higher than analysts' forecasts.

The world's second-biggest fashion retailer made around 2 billion Swedish krona ($229 million) in profit before tax for the June to August quarter. Its shares were up 11% in early trading.

Analysts had on average forecast a profit of just 191 million krona ($21.8 million), according to Refinitiv's SmartEstimate model, which is weighted towards more recent estimates and higher-ranked analysts.

But H&M's profit is less than half of the 5 billion crowns ($571 million) it achieved in the same period a year earlier.

Sales from the group's eight brands, which include H&M, Monki, and H&M Home, fell 19% to 50.9 billion crowns ($5.82 billion), against expectations of an 18% drop. This is a significant improvement on the previous quarter, where H&M's sales halved in the three months to May.

"H&M group's recovery is better than expected," the company, which has more than 5,000 stores globally, said in a statement. "More full-price sales combined with strong cost control enabled the company to already turn to profit in the third quarter."

The company has been cutting staff, opening fewer new stores than planned, and permanently closing others to cut costs.