The pair said they have both seen revenues return to at least pre-pandemic levels over the latest trading period.
MADRID/STOCKHOLM (Reuters) -Sales at Zara owner Inditex and rival H&M are back at pre-pandemic levels or better, as the world's top two fashion retailers ride a recovery in demand despite supply chain challenges. Spain's Inditex, the world's largest fashion retailer, said on Wednesday sales at constant currencies were up 10% on 2019 levels in the quarter to the end of October, and had continued at that rate up to Dec. 10, helped by strong online demand. Smaller Swedish rival Hennes and Mauritz (H&M) said sales in local currencies matched pre-pandemic levels from September through November. "The recovery continues to gain momentum," Inditex's Capital Markets director Marcos Lopez said in a statement.
H&M Hennes Mauritz shares slumped 5% as Goldman Sachs downgraded the Swedish retailer to sell from neutral and cut its price target to 160 kroner from 200 kroner. The broker blamed rising costs, including for freight, cotton and polyester. Cost of goods sold inflation could go from -6% in fiscal 2021 to +9% in fiscal 2022. Though the retailer will act to mitigate the cost pressures from supplier negotiation, sales mix and pricing, it said gross margins will contract by 140 basis points.