H&M, the world’s second-biggest fashion retailer, reported Wednesday a smaller-than-anticipated increase in sales.
This is the latest sign it is struggling to compete with Zara-owner Inditex.
Shares in H&M were down 6% in early trade, underperforming the wider Swedish market.
The Swedish group said sales measured in local currencies for the period, rose 3% from a year earlier.
An H&M spokesperson highlighted, that the local-currency sales were slightly better than estimated and implied that sales in reality fell 3% in February and not 6%.
Expert has called the results “worse than feared” and stated that there is expected a loss in earnings before interest and taxes, when the group reports its full first quarter results on March 31.
H&M, which is in the middle of a program to reduce staff and cut other costs, said net sales were up 12% from a year earlier to 54.9 billion crowns ($5.26 billion).
By contrast, market leader Inditex reported Wednesday a 13.5% increase in Feb. 1 to March 13 sales, and a 27% net profit increase for its financial year.
H&M’s profits reportedly fell last year due to the company not fully passing on elevating raw material, shipping and energy costs in an attempt to retain its price-sensitive customers.
Source: Reuters.com
