H&M sales up but it hints at need for more investment

Fashion giant H&M achieved sales growth for the fourth successive quarter but analysts remain concerned about pressure on margins given the need for further investment in its digital business.

The Swedish group, which is the world's second largest fashion player behind Inditex, said that in the period from 1 March 2019 to 31 May 2019, its net sales increased by 11% to SEK 57,474m. In local currency it represented a 6% rise. This performance was just ahead of expectations.

However in a statement, the company said: "The rapid changes in the fashion industry continue and we can see that our own transformation work is taking us in the right direction, although hard work and many challenges still remain. As customer satisfaction and sales increase, we have intensified our transformation work even further."

Analysts took this to me it needed to spend more and its shares remained depressed and were down -1.8% at the start of the day.

Some analysts believed that the fashion group had probably gained share in key market but were concerned that inventory levels remained high and that comparisons in the third quarter became tougher.

A full six-month report will be published 27 June.