Poor weather cools sales at H&M

The Swedish group, which also owns Cos, Monki, Weekday, & Other Stories and Arket, said net sales increased by 6% in the three months to 31 May, to SEK57.6bn (£4.2bn), below analyst expectations for a 7% increase.

In local currencies, net sales were largely flat.

However, the retailer was more upbeat about current trading, noting that June had got off to a "good start". That helped support shares, and by 1045 BST the stock was 4% higher.

Victoria Scholar, head of investment at Interactive Investor, said: "The fashion brand’s optimism towards the current quarter, thanks to an expected improvement in the weather, is providing a boost to shares.

"So far this year, shares in H&M are up around a third, broadly in line with Zara parent company Inditex’s year-to-date gain. Amid the pressures from squeezed household budgets, consumers appear to be trading down from more expensive brands to high street retailers."

Jefferies said: "[The] sales update is a little less downbeat than feared, with organic sales flattish both on a year-on-year basis and versus pre-Covid levels.

"More seasonal conditions appear to have emerged of late, leading to a good start to the third quarter. We expect no meaningful changes to investors’ full-year earnings expectations."