STOCKHOLM On Thursday, H&M reported quarterly sales that were lower than expected. This is because shoppers are tightening their belts because their energy and food bills are going up, and the world’s second-largest fashion retailer is having trouble keeping up with rival Zara.
The Swedish group’s net sales for the third quarter were 57.5 billion crowns ($5.36 billion), which was 3% more than the same time last year. Analysts polled by Refinitiv had expected, on average, a 5% rise for the June-August quarter.
If you look at sales in the local currency, they were down 4%.
H&M, which does most of its business in Europe, said in a statement, “The third quarter got off to a slow start, which was typical for the industry in many of the group’s major markets.”
“Sales got better as the quarter went on, and the fall collections got off to a better start than last year.”
Related: Inditex, which owns Zara, saw its first-half sales rise before a possible slowdown.
The performance was much worse than that of market leader Inditex (BME:ITX), which owns Zara. This week, Inditex reported that sales for its May-July quarter grew by 16% in constant currency terms. The Spanish group’s growth slowed to 11% from August 1 to September 11.
Inditex said on Wednesday that it will raise prices again this fall to make up for rising costs, even though there are worries that the cost of living crisis will cause demand to drop.
On Sept. 29, H&M will post its full earnings report for the third quarter.
($1 is worth 10.7226 Swedish crowns)
