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H & M Hennes & Mauritz AB
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Good day and thank you for standing by. Welcome to the 3-month report for 2021. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Helena Helmersson, CEO. Please go ahead.
Hi, everyone, and thank you for joining us today. Welcome to this telephone conference about the H&M group's first quarter results 2021. With me today is our CFO, Adam Karlsson; and Head of Investor Relations, Nils Vinge. I will start with a comment about the recent events surrounding H&M in China. Then I will give a summary of the first quarter, followed by current developments. After that, we will be happy to answer all your questions. You will find the 3 months' report on hmgroup.com, Investor Relations. About the situation around H&M in China, it will be difficult for us to say more than the following comment today, and we do hope for your understanding. We are working together with our colleagues in China to do everything we can to manage the current challenges and find a way forward. China is a very important market to us, and our long-term commitment to the country remains strong. Having been present there for more than 30 years, we have witnessed remarkable progress within the Chinese textile industry. Being at the forefront of innovation and technology, China will clearly continue to play an important role in further developing the entire industry. We are proud that our suppliers are being part of that development, and we want to continue contributing to driving progress together with our partners and stakeholders in the country. We want to be a responsible buyer in China and elsewhere and are now building forward-looking strategies and actively working on next steps with regards to material sourcing. Together with all relevant stakeholders, we want to collaborate to be part of the solution and jointly build a more sustainable fashion industry. As a global company, we comply with local laws and regulatory frameworks in all the markets where we operate. Our company values are built on trust, respect, integrity and dialogue. We wish to focus on our core business and on what we do best: bringing fashion and design to our customers all around the world. We are dedicated to regaining the trust and confidence of our customers, colleagues and business partners in China. By working together with stakeholders and partners, we believe we can take steps in our joint efforts to develop the fashion industry as well as serve our customers and act in a respectful way. And now moving over to the 3 months' report. Looking at the first quarter, the pandemic continued to have a big impact. At its most, around 1,800 or 36% of our stores were temporarily closed. Despite this, we managed to further strengthen the financial position of the group. Again, our teams have done a fantastic job in a very challenging time. I am truly impressed and proud of all our colleagues. We have managed to stay customer focused and be flexible, striving to meet customer demand despite recurring lockdowns and restrictions. We clearly see that customers appreciate our offering when they have the opportunity to shop. When markets have been allowed to open, store sales have picked up while, at the same time, online sales have continued to perform very well. The pandemic has fast-tracked changes we saw happening in society already before such as increased digitalization and sustainability awareness. Our pace of transformation is high, and thanks to significant investments in recent years, we can meet changing customer behavior and higher expectations with increased speed. We want to give our customers unbeatable value, and our focus remains on developing our unique brands and offer customers the best combination of fashion, quality, price and sustainability. Our digital initiatives are continuing along with the development of our store network. We see that customers both want to see, feel and try undergarments in real life and use digital channels to explore fashion, be inspired and shop. Looking ahead, we will strengthen the interaction between the channels further in order to offer customers the best experience at all our brands. Our customer base is growing, and one example of this is the rapid increase in the number of members of H&M's customer loyalty program. And while we are humbled by the still uncertain situation due to the pandemic, it is fantastic to see the great interest that our customers are showing in our collections. Our customer offering is well positioned, and we will continue our transformation at full speed to create long-term, sustainable and profitable growth for the H&M group. Thank you very much, everyone, for listening, and we are now happy to take your questions.
[Operator Instructions] Your first question comes from the line of Fredrik Ivarsson at ABG Sundal Collier.
Two questions for me, if I may. First one on the stock-in-trade and potentially any guidance on markdowns for Q2. I don't think you commented on it in the report. So if you could say anything about the composition and potentially also any guidance on what we should expect in terms of markdowns for the current quarter, that would be helpful.
Yes, Adam here. We see that we have a very, very commercial composition in the stock, and that's reflected also in in the selling, particularly in the online channel here. So overall, we see a healthy composition. But with the uncertainty of how the stores and the restrictions connected to how we can operate in the stores, we probably see a slightly increased need for markdowns compared to 2 years back. Of course, it's very difficult to assess how the coming months will evolve, but that's sort of our estimate at this point. So a strong composition, but potentially, if the stores can start to operate again, we could see a slightly elevated need for markdowns compared to 2 years back.
Yes. Appreciate it. That's very helpful. And the next question on the development in some markets where you haven't been as affected by lockdowns and so forth. I guess Australia, Russia and China are 3 examples where you've seen a decent development. Can you say anything about what you see in those markets in terms of sales?
Yes. As you saw in the report, sales during March, the first to 28th of March, is up compared to last year with 55%. And if we look at some of the markets where we have had no or less restrictions, we do see that sales have good levels also compared to 2019.
Your next question comes from the line of Richard Chamberlain of RBC.
A couple from me then, please. First of all, on the 2 new logistics centers you've opened in the U.S., are both of those now fully operational? And what are the plans for further automation in the group? That's my first question, please. The second one is on expectations for government support to continue in the second quarter. How do you view that at the moment compared to what you saw in Q1? I think it was a SEK 700 million benefit by the looks of it. That's my 2 question.
Okay. Nils here. Regarding the logistics centers in the U.S., yes, they're up and running, but we are continuously, of course, developing and looking to add more capacity in Northern America. Second question, Adam?
On the government support, the uncertainty we communicated last year regarding how the situation will evolve also reflects in sort of the prognosis for how the governmental supports will evolve going forward. So we're assessing both, of course, the restrictions market-by-market and also how it is reflected in how the governments support the different companies and industries. So it's difficult to give any guidance. It's all dependent on how now the situation evolves in different markets and how governments respond to that in supporting different parts of industries and companies.
Your next question comes from Simon Irwin of Crédit Suisse.
Could you just talk us through the -- where you stand re kind of current pricing and input margins? I mean in short, are you seeing better input prices being taken through to the bottom line at the moment? And particularly, what's your view about the second half of the year?
Well, there are a number of factors, obviously, affecting here both raw material prices and, of course, sort of capacity, demand and supply in all of our markets and other things connected to transport. So overall, we see a slightly positive view going ahead, but it's also difficult to assess how big that will be and at what point. But as we write and report, we see a slightly positive sum of those external factors, so to say. And obviously, at this point in time, our sort of the offer connected also to creating a strong customer offer with price, quality, fashion in a sustainable way, we have the ambition to take out as much as possible to the customers to continue to strengthen our position.
And can I just follow up on -- you talked about kind of sales being at a good level versus -- where markets are open. Can you just disaggregate that between online and stores as to what kind of store sales densities you're seeing, say, versus 2019 at the moment in open stores? I.e., you're seeing a big shift online and lower store sales densities? Or is it not that extreme?
Since we have a way of looking at sales in a more integrated way and not channel by channel because we clearly see how the different channels, both physical and digital, really strengthen each other, we kind of look at the total. And as you see in this report, we have a continued strong online development. And what we do see then, again, in some of the markets -- several of the markets during -- until the 28th of March, we do see a positive development in sales compared to then also 2019. So that kind of also makes us feel even more confident about the recovery both when looking what happened after the first wave and also what has been happening in those markets where restrictions are being lifted as vaccinations are being rolled out.
Okay. Can I just check on the basis for that minus, that plus 55% you're talking about? Is it exactly the same period as the minus 46% that you were talking about last year so that we can get a 2-year stack?
Yes, it's roughly the same. Last year was for the entire month, so it's roughly the same.
Your next question comes from Georgina Johanan of JPMorgan.
Just two from me, please. First of all, on the gross margin in Q1, I think it was a little bit of a deeper decline than analysts had expected. Was that perhaps just the extra deleverage that I haven't been sort of modeling enough? Or was there any incremental investments in the offer in Q1 coming through in the gross margin that are worth calling out? That's my first one. And then the second one, appreciate what you've said in terms of the gross margin environment as we move through the year and external factors being slightly positive. But can you actually talk to whether you're worried about any product delays, for example, obviously, with the news yesterday that we're going to see further sort of shortages in the global shipping channels? Just whether you're concerned on any product delays into any market, please?
Two questions and starting with the first one. I mean there are, once again, a lot of factors affecting the gross margin. And the 2 biggest ones are -- and you already mentioned the sort of the negative leverage we have on the semi-fixed and fixed costs due to our sort of function-based income statement. So that is the majority here. And then, obviously, markdown levels affect as well. But then there are also other smaller factors connected to sort of composition, what kind of garments we sell, where and when, so to say. But you're on top of the biggest factor, which is the negative leverage that's connected to lower selling. On the supply chain disturbances, obviously we are, as the whole world, experiencing an imbalance here that started already a year back with lower sort of shipping and then it picked up and became a very, very high demand for capacity towards the end of 2020. And this disturbance, obviously, will not support that, but we don't see it will have any material effect. We expect some congestions in European ports the coming weeks. And then hopefully, we can start to see that the situation eases. But not any material effects on our selling.
Your next question comes from Rebecca McClellan of Santander.
Just a quick one. Could you possibly give us the -- like the end of March exit rate rather than the sort of the number for the first to the 28th?
Well, any comparison compared to last year becomes a bit tricky because last year, as you know, as you see in the graph, it was, I mean, more or less -- most markets closed down. And it -- as Helena said, it depends very much from market to market how restrictions are eased or even increased and, of course, lockdowns. So the number -- so it's very difficult to give an exit rate for the group as a whole.
Your next question comes from Charlie Muir-Sands of Exane BNP Paribas.
Yes. I have two, both related to rent, please. Firstly, thank you very much for quantifying again the amount of government support that you recognized in the P&L in the quarter. Could you help by giving us the figure on the amount of temporary rent relief that you recognized in the quarter as well? And then secondly, you obviously made comment in the statement with respect to the negotiation of rents down on a recurring basis as well. I wondered if you could give us any sense of quantification as to how much the run rate of your rental base has reduced versus, let's say, a year ago on a recurring basis.
Well, to start with, obviously, in this environment, we get improved terms when it comes to rents and so on. And -- but it's not just the actual rent as such, it's also the flexibility, the amount of variable rents and so on and, of course, landlord contributions. So we don't break out the exact numbers in terms of the questions you asked, I'm sorry, Charlie. But all in all, of course, it's positive environment as -- being in our position in this environment.
Could I maybe ask it a different way, which is to say, if and when your revenue base recovers to pre-crisis levels, would we -- could we expect rents-to-sales to be better than it was previously?
Yes.
By how much?
We'll come back to that.
Your next question comes from the line of James Grzinic of Jefferies.
Helena, Adam and Nils, I have a quick one. When you look at western markets that had stores open for quite some time, so I'd presume the U.S., Spain and Italy, how does online behavior change? What happens to the returns rate? What happens to the basket composition and basket size? We'd be really interested to understand that.
Look, we continue to see that the channels really, really well complement each other. So there has not been any major differences in how online performs once stores are able to trade again. It's rather that customer sees the full benefit of how they can interact with us. So we continue to see that demand is fairly same between the channels, and it's, of course, then also COVID related. Now we spoke about that before, more on the basics and the homeware, we still see that trend, but also more interest in sort of the fashion bit. So very little difference, and we can continuously see that the channels interact and complement each other really well.
I complement with this also being why we also can be confident. We feel confident about the recovery once restrictions are being lifted, seeing how many customers that have started to shop online and also getting proof in markets where restrictions are being lifted that they also want to meet us in the physical channel. So that, we think, is really something strengthening us in the recovery plans.
So just to confirm, as there's a shift from loungewear more to fashion, the return rates don't change materially in those markets?
No. Not that we've seen so far, no.
Your next question comes from Aneesha Sherman of Bernstein.
So I have two questions, please. The first one is around H&M versus the other brands. So you reported that the other brands were -- performed slightly weaker than H&M brand, negative 22% versus 21% for the quarter. Are you seeing the recovery in the March period also being slightly weaker for the smaller brands or about in line with the base brand?
In the report, we say that the group net sales decreased by 21% in local currencies and sales for portfolio brands decreased by 18%.
So slightly better.
So portfolio brands, slightly better. And of course, it's a little bit different on different brands on which markets we are on and also the share of online versus store. But slightly better overall than -- for portfolio brands.
And a very strong online...
Right. My mistake. I was reading the total, not the local currency. So do you expect that trend continuing, that the portfolio brands are slightly better performing?
Well, I think it's difficult to compare just like that because the share of online versus -- or digital versus online is a little bit different on different brands and also the different markets that we are on. So I would say actually that we see very similar patterns. And the pattern is absolutely related to how we can stay open in the different markets due to the COVID-19 situation.
Okay. And then my second question is about -- so you spoke about the rent savings. And last quarter, you helpfully gave the 1/3, 1/3, 1/3 breakdown and saying 1/3 of the rent savings will likely be permanent. Can I ask a similar question about labor? You've made some labor cost cuts as part of the transformation, but some of those are temporary related to store labor and you've also received some government support on labor. Net, as we go into Q2, what roughly percent of labor cost savings do you see as permanent?
We have learned a lot during this year in how we continue to optimize the -- or increase the customer experience and spend our time on the things that the customer values, so to say. So I believe that we take with us some learnings. It's very, very difficult to see how this will evolve now the coming months. But of course, we take away positive learnings from this huge stress test of how we operate.
Okay. Well, can I just ask, do you expect to see a permanent cost saving, if not to quantify it?
I would rephrase it. And I said that it's about -- I mean, there's so much focus on cutting costs, but it's more -- for us, it's more focused on how can we grow without growing cost as much as top line.
Okay. And the answer is?
Well, we are convinced that we can. That's the answer.
Your next question comes from Daniel Schmidt of Danske Bank.
Yes. A question on Adam's response on the markdown guidance for Q2. Does that implicitly assume that most stores are open again by the beginning of May? Or how should we read that, Adam?
That was more of a comment that, of course, being restricted during first quarter, we guided for slightly higher markdowns in first quarter than what they came in. We spoke about 100 to 150 bps. They come in around 100. So we still believe that there is more activity going forward that's needed to make sure that the composition improves even more going forward. So it's not drama, it's just that it's more of a residual to lockdown effects, being closed and restricted during first quarter.
Yes. No, but I have to say that the sort of markdowns have been a positive surprise given the situation that you've been in now for quite some time. And sort of asking the long-term question there as well, do you think that there is a learning that you've sort of received during this pandemic that there's going to be more flexibility for you guys going forward in a more normal world as well? Is that going to be one of the learnings?
Yes. Definitely, we have learned a lot. And I am really proud how we've been able to take fast decisions and work in a much more flexible way. And speed is one of the key focuses also going forward.
Yes, yes. Clear. And then a second question on the cash release on payables. I think you're right, just above SEK 3 billion. And I think you stated in connection with the Q4 report that those SEK 10 billion you guided for was going to be evenly spread through the year. Is it a little bit front-end loaded? Or is it sort of a potential upside to these SEK 10 billion?
No, but we wanted to guide for it because we saw it had material impact for the year, and we tried to give as good as we could estimate of how it would be spread. So the full year sort of estimate of the totality still holds. And it's all dependent on how much we buy, where and when depending on how this is rolled out and in the supply chain. So the full year guidance holds, and this quarter was a little bit above sort of 1/4 of the total impact.
Your next question comes from Rosie Shepard of Retail Week.
First of all, focusing specifically on the U.K. where stores are going to be opening on April 12. I was just wondering what your specific plans are on that. Will you be opening all stores at the same time? And what are your expectations for demand on that and how you're going to be generating sales? Will you be taking advantage of the late opening hours and promotions and things like that?
Well, the strategy in U.K. is similar to other markets in how we go in U.K.'s case then from full lockdown to gradually reopening. So of course, we're going to follow the authorities' guidelines also in U.K. We make sure that we put safety for customers and colleagues first, and we will open up in a responsible way and try to, in both digital and physical channels, of course, welcome the customers back and just focus on us also delivering a great customer offer to them.
Okay. And anything about the late opening hours that's just been announced?
I can't comment on that detail. Sorry about that.
Okay. No worries at all. And then you've also kind of mentioned obviously about digital and sustainability and things like that. How would you say that your target customers are shopping differently to prepandemic times? What are their priorities like?
We do see that quite many customers have been introduced with digital channels for the first time. And I guess what is encouraging is to see that as stores are being opened in some of the markets, they really tell us that they want to meet us both in the physical and in the digital channels. So we believe that is really encouraging. And we also see that the customer base has grown. We can see at the H&M's loyalty club that we are -- have 120 million members. That is 6 million more just in a quarter. And looking back a year, it's 50 million customers more. So of course, we do see that many customers that wanted to meet us in physical channels now also want to meet us in digital.
Yes. And what about sustainability? How does that sort of fit in that?
Well, sustainability is, of course, integrated in everything we do. We see that the pandemic has come with an increased awareness for customers, which, of course, makes us feel that our position with our customer offer, where we have price, fashion, quality and sustainability all integrated, that is, of course, really good for us. We do different things to engage even more going forward when it comes to sustainability and customer engagement. For example, that we have launched green points in the loyalty H&M Club so that we also encourage certain behavior, which is a great way for us to engage and continue to increase awareness.
Your next question comes from Niklas Ekman of Carnegie.
And sorry for addressing the Chinese issue here. I realize that you said you didn't want to elaborate too much on details here. But I'm just curious, the disruptions that you've seen so far here, have they been restricted to your stores? Or have you seen any impact on the sourcing side as well?
I understand that you want to know more about the situation. I truly hope for your understanding that we need to refer to the statement that we said in the beginning.
Okay. Fair enough. And the second question, I was curious about your comment here about online sales growth remaining strong when stores reopen. I'm curious, does this in any way change your view on your store portfolio? I see you kept your store guidance for the full year here intact. But how do you see this going forward? Do you think there will be a lesser need for physical stores going forward, that store closures could accelerate later in '21 and '22? Or how do you view this?
I see this as a great opportunity for us going forward with increased customer base, meaning that more customers have started to meet us in digital channels. And as we now hopefully can soon start reopening stores as restrictions are being lifted and the vaccinations being rolled out, I truly think we have a unique opportunity when looking at the different roles that a physical store can play. Of course, we see this as a network of touch points, touch points that needs to be integrated because they are in both the digital and physical channels. We stay with the indication that it will be a net of minus 250 stores. That's our best estimate for this year. And also in that plan, of course, is to then really work on the strategies going forward to optimize these physical stores but in an integrated way with the digital channels. This is a great opportunity for us.
Your next question comes from Nicolas Champ of Barclays.
I will try my luck with China again. Just a factual one, but could you tell us how many stores are currently closed in China? I mean Bloomberg reported that 6 stores have been closed by landlords. Can you confirm this number and say whether it's still accurate number? The second one is about your online sales. I mean you said that they rose by 57% in Q1. But -- so what's the proportion of sales achieved online now as a percentage of total sales? And the last question is about your dividend. So you expect to make a decision regarding cash dividend this term. But as you also said, your balance sheet is strong and you are on track with your working capital relief, for instance. So could you be a bit more specific regarding the criteria that you will monitor in order to take your decision to pay a dividend, a cash dividend, this term, please?
Around 20 stores are right now being closed in China.
And when it comes to online share, there's a huge spread in some markets. Where all stores were closed, we have 100% online share. In some markets, we haven't even opened online, so it's 0. So it's -- of course, there's a very big share online in this quarter, but it's not a relevant number really if you look at the aggregate number, sorry.
And when it comes to the dividend question, as you know, this is a question for the Board to suggest. And what we see now is a strengthened financial position, but we still need to be humble about the uncertainty and the fact that it's difficult to predict what's going to happen the coming months due to the pandemic. So the Board will get back later on with a suggestion on both timing and level of dividend when we can kind of oversee more around the consequences of the pandemic. So I guess that's what we can say about the dividend part.
Your next question comes from Geoff Lowery of Redburn.
Just one question. Can you talk a bit more about the H&M Club in terms of how significant it is to your online and/or stores business? Where are the 130 million-plus members, et cetera, just to give us some flavor of how significant it is or isn't on a sort of operational basis for you?
Well, the H&M Club is obviously a great way for us to engage with customers and create relationships that goes far beyond just transactions now and then but truly to engage. So having 120 million members is, of course, really encouraging for us, and those are in 26 markets. And members are then rewarded not just for purchase but also for commitments such as bringing in old clothes, for example, for H&M's garment collecting or choosing climate-smart deliveries. And of course, it's a great way to activate engagement around new special collections and things like that. So we're really proud about the loyalty program and the fact that we have been able to grow and attract more customers to that channel.
And would they be -- would they account for most of your online business?
Yes. I mean once you're an online customer, you are normally also a H&M Club member. So it's very close...
By definition. Okay. Understood. And the...
But you can...
And the lever to recruiting customers, is that offering -- you offering free delivery? Is it the points? What's your sense of the sort of why behind why customers are signing up? Which of the many things you're offering them makes the real difference, do you feel?
There are many aspects. Helena mentioned a few of them. Obviously, it makes, I think, the customer experience more tailored to yourselves and also removes frictions. And that is something we highly see that customer value, but I think also what Helena refers to, creating this relationship where you can interact in more ways. You can sort of find your favorites, see whether they are in store, go and pick them up. So there are a lot of sort of components to tailor the experience to you and make the whole experience more frictionless. And as we also mentioned then, there are more things to come also rewarding and incentivizing behavior that we think is a good way to engage customers going forward, connected then to sustainability and so forth.
And I would like to add that, I mean, even though it's a loyalty scheme, it's not about making customers loyal to us. That's very difficult. It's more about us becoming even more loyal to our customers by understanding more. And the more loyal we are, the more relevant we are, the better.
Your next question comes from the line of Demetris Demetriou of Schroders.
Just two quick ones from my side. So the first one is, and please excuse my ignorance, on gross margin. You mentioned that the change is mainly the result of the leverage and the function-based income statement, I think. Can you elaborate a bit more on that? I'm relatively new to the name. So if you could comment on that, that will be useful. And my second question is around CapEx. Do you have a guidance for 2021?
On the first question regarding gross margin, what Adam alluded to was in last year, in Q2, when we had a 50% drop in revenues, we saw a huge deleverage in COGS as a result of that. Then we have a big overhead in organization, our sourcing organization, production organization, which, by definition, of course, is pretty -- not fixed but semi-fixed so we can't, from one quarter to the other, scale down or scale up. So in -- typically, it's a huge strength for us because we have control of the whole supply chain and also when it comes to sustainability and so on. But of course, when revenues drop so significantly, it becomes a deleverage. And in this quarter, with such a big drop in revenues, of course there is a big element of deleverage as a result of that. Your next question, I didn't get that, sorry. So could you say your second question again, please?
For sure, yes. So on capital expenditure, do you have guidance for 2021?
Okay. When it comes to CapEx, capital expenditures, we -- obviously, in this quarter, we're still -- or last year, as a result of pandemic, we slowed down on everything, and CapEx was half more or less compared to the previous year. Now we're starting to, of course, speed up again and be more forward leaning. And we expect this year the CapEx will come up again because, of course, last year is not sustainable. But it's still a lot lower than last year. But the best expectation, as we've said, was around SEK 7 billion to SEK 8 billion or something, but we will come back to that going forward.
Your next question comes from the line of Anne Critchlow of Societe Generale.
I'd like to ask a question on RFID, please. How far have you got with this in terms of implementing it by concept and country across the group? And what are the benefits you're hoping to get from this in the future? Or what is it bringing you already?
When it comes to RFID, we have rolled that out in around 20-something markets. And of course, this is a great way for us when it comes to following the supply chain, when it comes to traceability. For us, it's a really good and great way to make sure that we have the right product at the right time for the right customer, if that makes sense, when it comes to having a supply chain that is more demand driven so that we can make sure that whenever the customers have a demand, that we can supply that. So that's really having a positive impact.
Your next question comes from Olivia Townsend of UBS.
Yes. So my first question is on consumer demand in markets that are further along the reopening journey like Australia. So I'm just wondering, are you seeing -- are you still seeing elevated demand for lockdown products like basics and loungewear in these markets? Or is demand moving more towards sort of fashion-focused products? And if this is the case that demand is moving towards more fashion-focused products, could you just talk about how you're managing your inventory to cater to these changing demands? And then my second question is just on online. So I've noticed in some markets there are slightly extended delivery windows for online at the moment. Is this mainly a function of higher demand? Or is it something to do with the warehouses not being able to really cater to that level of demand?
When it comes to consumer demand, overall we see roughly same indications as we spoke about in the last quarter, meaning that homeware is really strong together with kids is also really strong. And also, we see that the more kind of casual basics, which goes well in line with trends, also now coming, which is quite a lot around casual and sporty. So I would say that the whole trend landscape is also impacted by the whole COVID situation in the world. And then looking at some of the markets where restrictions are being lifted, it's a little bit early to say how that is kind of impacting since the trend landscape is kind of accordance with working from home. So let's see how that develops. Looking at coming trends, we also, for example, see that dresses is coming strong but also more comfortable fit dresses. So a little bit hard to say exact patterns, but I hope that gave some guidance.
And on the online customer promise, we actively monitor this, and I must say that the whole supply chain and our colleagues in the warehouses and the customer service really has been heroic during this year and driving and enabling this kind of growth. So we're monitoring and making the necessary adjustments when it comes to assessing the -- both the staffing and all other things with the scheduling but also ensuring that we have the right last-mile setup to ensure that we can deliver connected to our customer promise. So we monitor it and continuously ensure that we work towards a very, very strong customer offer and customer promise.
[Operator Instructions] Your next question comes from the line of Andreas Lundberg of SEB.
Just a short one from me about the governmental support. How much, if any, have you received from Sweden in the first quarter?
It is a smaller portion. It's around SEK 10 million for the quarter.
And do we expect some support also in the second quarter from Sweden?
As previously mentioned, we assess this on an ongoing basis and see how the situation evolves both, of course, in individual markets but also with the global perspective. So we need to get back to that. But we assess the situation, how it evolves, and then we decide upon that.
Your next question comes from the line of [ Peter Rowett ] of [ SVT ].
I would like to -- I'm trying to understand your statement, Helena, from the beginning about China. I would like to ask you, under what condition are you ready to reverse your decision to not buying cotton from Xinjiang province in China?
I would kindly ask for your understanding that we refer to the statement that we said in the beginning regarding the situation in China. Thanks again for your understanding with that.
Your next question comes from the line of Jorg Nowicki of TextilWirtschaft.
I actually had two questions. One of them was to understand, of course, more about the situation in China. But obviously, you don't want to go deeper to that. But just to make sure that I got your answer a few moments ago correctly. These 20 stores are closed because of this current situation, not because of any other reason like local COVID outbursts or anything else?
No comment on that. No comment on that. Thanks again for your understanding.
Okay. But how about the big Chinese platforms such as Tmall? Is H&M accessible there at the moment?
We please ask for your understanding. So no comment around the China situation except for the comment we made in the beginning.
Okay. Then my second question would be about COS. In the report, one can see that you are also closing down quite a number of COS stores. What is the reason for that? And what are the perspectives of the brand?
You said COS? COS?
Yes. COS, yes, exactly.
Yes. As Helena mentioned, we continuously evaluate and make sure that we have a healthy and relevant store portfolio. So there's no specific changes. But different brands have gotten different far in their footprint development. So part of the continuous evaluation, we act when we get -- we get more insights on how we want to build it for the future, I should say.
There are no further questions on the line, so I'd like to hand back over to Helena Helmersson to close the call. Thank you.
Well, thank you all very much for participating in this conference call, and we wish you all the best. Bye.
Thank you. That does conclude our conference for today. Thank you all for participating. You may all disconnect.