STOCKHOLM, Sept 15 — Sweden’s H&M reported on Friday flat sales in its most recent quarter, lagging expectations as the fashion group struggles to attract customers while the cost of living crisis drags on.
“The work towards the company’s goal of reaching a 10 per cent operating margin in 2024 is going in the right direction. Profitability and inventory levels have been prioritised in the quarter,” H&M said in a statement.
The world’s second biggest fashion retailer said local-currency sales, the figure most closely watched, in the three months from June to August were “flattish” year-on-year, trailing an average 5% growth forecast in a Reuters poll.
H&M’s net sales were up 6 per cent to 60.9 billion Swedish crowns (US$5.45 billion), lagging the 63.5 billion predicted by analysts.
H&M had seen a reversal of fortune this year that lifted its share price by 53 per cent as sales rose while cost cuts announced last year took effect, but faces stiff competition from Zara owner Inditex and China-founded fast-fashion retailer Shein.
On Wednesday, Inditex beat expectations with a 40% jump in half-year net profit even as the world’s biggest fast fashion company slowed the pace of its price increases. — Reuters