H&M sees warm autumn weather knock September sales

H&M has warned over tumbling sales in September as unusually hot weather across many European markets dented demand for autumn ranges.

The Swedish group said it expects sales this month to fall by 10% year-on-year in local currencies.

While four percentage points of the sales decline is down to the group’s discontinued operations in Russia, it said the drop should be “seen in the light of unusually hot weather in several of the company’s European markets, which has had a substantial negative impact on sales during the month”.

It shows H&M falling further behind its fashion rival, Zara owner Inditex, which recently reported a 14% leap in constant currency sales between 1 August and 11 September.

Retail analyst James Grzinic at Jefferies said H&M’s performance in recent weeks shows current trading is “as pressured as feared”.

H&M reported a leap in earnings over the three months to 31 August, at SEK 4.74 billion (£345 million), up from SEK 902 million (£65.6 million) a year earlier, when results were hit by its exit from Russia.

But sales over the third quarter were “flattish” over its third quarter in local currencies. When translated into Swedish krona, sales lifted 6%, it said.

Helena Helmersson, chief executive of H&M, said: “Sales in the third quarter started strongly with pent-up demand for summer garments following a cold May in most of our major markets.

“The effect then gradually decreased during the summer.

“There was a weaker end to the quarter, with comparative figures affected by the temporary reopening in Russia in August last year.

“Having now moved into September, we can see that the start of the autumn season has been delayed because the month so far has been marked by unusually hot weather in many of our European markets.”

The company said it was on track to reach its goal to increase operating margin to 10% by the end of next year, while Ms Helmersson said the group’s cost-cutting programme was continuing “at full speed”.

Hennes & Mauritz was founded in Sweden in 1947 and is quoted on Nasdaq Stockholm.

Image: PA