H&M has reported sluggish sales in recent months as efforts to tighten stock left some stores unable to meet shopper demand.
The Swedish fashion giant nonetheless said its work to modernise and improve shops was going to boost profitability in the long run.
It reported net sales of 104.4 billion Swedish krona (£8.1 billion) for the first half of its financial year, between December and May, which was 3% lower than the same period a year before.
Sales in Western Europe – where H&M makes the most money – were down by 5% year-on-year.
Chief executive Daniel Erver said sales in the latest quarter were “somewhat lower than planned”.
He said the company had been taking steps to reduce the complexity of the organisation and improve the productivity of its stock inventory.
He added: “The tighter inventory management has, however, in some cases affected our ability to fully meet demand.
“Our assessment is that there is potential to further increase precision in order to create a better balance between availability and demand.”
“We operate in a world that continues to be characterised by uncertainty and rapid change,” Mr Erver said.
“The improvements we have made in recent years have strengthened profitability, simplified operations and increased our ability to act closer to the customer.
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