By Anna Ringstrom

STOCKHOLM (Reuters) -H&M’s sales jumped from March to May compared to a year earlier as pandemic restrictions eased in many markets and online demand stayed strong but revenue was still well below 2019 levels.

The world’s second-biggest fashion retailer said on Tuesday sales were up 62% year on year in the period – its fiscal second quarter – or 75% measured in local currencies, to 46.5 billion crowns ($5.59 billion).

Compared with two years earlier, sales were still down 19% as stores stayed closed for most of the quarter in Germany and France, and as footfall was slow in many stores that were open.

“As more people are vaccinated a number of markets have gradually allowed stores to reopen and the H&M group’s strong recovery continues,” the company said in a statement.

“Online sales have continued to develop very well, even as the stores have opened. This shows that customers appreciate the collections and being able to shop via their preferred channel.”

In the same quarter a year earlier, the measures to tackle the pandemic meants much global trade and retail activity ground to a near halt, with about 4,000 of the Swedish group’s 5,000 stores temporarily closed.

H&M said local-currency sales in the first half of June were up 35% on the year and up 2% from the same period of 2019.

Market leader Inditex, the owner of Zara, and smaller rival Next, have also reported recovering sales on the back of easing restrictions.

Analysts at JP Morgan said H&M’s quarterly sales matched local currency expectations but said the early June reading indicated a slower recent recovery pace for H&M than for Inditex which is less exposed to Germany.

H&M’s shares were down 1% at 0730 GMT, taking a year-to-date rise to 21%, while the wider market in Stockholm was slightly up.

Inditex said last week that sales in May and early June were higher than two years earlier, as it reported forecast-beating February-April profits.

H&M, publishes full quarterly earnings on July 1, said about 180 stores were closed on June 13, down from 1,300 at the start of March but up from 140 at the end of May.

RBC analyst Richard Chamberlain, who has an ‘outperform’ rating on H&M’s shares, predicted H&M’s profits would recover faster than the overall market from the second half of the year.

($1 = 8.3244 Swedish crowns)

(Reporting by Anna Ringstrom; Editing by Louise Heavens and Edmund Blair)

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