H&M reported an 88% fall in profit for the year through November on Friday and warned the pandemic was still hitting sales at the world’s second-biggest fashion group.

The Swedish fashion retailer said its full-year pretax profit fell to 2.05 billion Swedish crowns ($245.29 million) from 17.4 billion, hurt by restrictions and lockdowns.

In its final quarter, profit fell to 3.67 billion crowns from 5.40 billion, less than expected, helped by large cost cuts. That beat the 3.07 billion expected by analysts polled by Refinitiv.

H&M had already reported a 10% fall in sales for the fourth quarter.

“The ongoing restrictions, along with the many temporary store closures, will have a substantial negative impact on the first quarter,” CEO Helena Helmersson said.

“However, it is clear that when customers have opportunity to shop – online and in certain markets with lesser restrictions – they are showing that the collections are appreciated,” she said in a statement.

Sales in December through Jan. 27, the first two months of its first quarter, were down 23% in local currencies.

Up to a third of H&M’s around 5,000 stores were temporarily closed in the period.

However, looking beyond the pandemic, analysts see some positives for H&M.

“H&M...has been gradually improving its offer which has led to an improved underlying (ex COVID-19) performance, which should in time be accompanied by an improved free cashflow trend,” said RBC analyst Richard Chamberlain who has a sector perform rating on the company.

Shares in H&M were up 0.3% at 0824 GMT.

The company said due to uncertainty, its board would come back later with a proposed date and level for resuming H&M’s dividend. H&M did not pay a dividend for 2019.

By Anna Ringstrom; additional reporting by Colm Fulton; editors: Niklas Pollard, Jason Neely and Emelia Sithole-Matarise.