H&M Q1 sales rise less than expected
Hennes & Mauritz AB
€13.81
17:30 05/11/24
Fashion retailer H&M reported a smaller-than-expected increase in first quarter sales on Wednesday as it continues to struggle to compete with rival Zara.
The Swedish firm stated net sales had risen 12% year-on-year to SEK 54.9bn (£4.29bn), short of consensus estimates for a print of 4.21%. Sales measured in local currencies rose 3%.
Excluding Russia, Belarus and Ukraine, where sales were put on hold as a result of the outbreak of war in the area, top-line sales grew 7%.
Discussing the results, analysts at Jefferies said: "With the rump of Q1 sales already reported, today’s update confirms sales growth likely turned negative in February. Investors have started becoming a little more constructive on HMB as headwinds turn into tailwinds within the COGS line (and will start being fully felt by Q4 22/23).
"But the sales pressures evident today will provide an ample counter to that budding optimism. The extent to which sizeable cost saves may be needed, in addition to building sales densities, in a bid to recover to a DD EBIT margin is less easy to fathom."
As of 1100 GMT, H&M shares had slumped 8.53% at SEK 122.86 each.
Reporting by Iain Gilbert at Sharecast.com