H&M summer sales flatline after rival Zara owner cheers boost

H&M sales flatlined in the latest quarter after its biggest rival Zara owner Inditex cheered a stronger performance.

The Swedish retailer said net sales, in local currencies, were flattish over June to September, compared to the same period last year.

The weaker-than-expected quarterly update suggests the chain has struggled to lift sales in recent months, as Europe has been swept with more volatile weather conditions.

Its shares, listed in Stockholm, were down by nearly 5% this morning.

But H&M said that net sales in Swedish krona increased 6% to £4.4 billion (SEK60.9 billion) year-on-year.

Excluding stores in Russia, Belarus and Ukraine, which have been impacted by Russia’s war in Ukraine, sales rose by 8%.

"Profitability and inventory levels have been prioritised in the latest quarter," the firm said, suggesting its broader financial performance had been prioritised over sales during the latest period.

The update to investors comes days after the group’s biggest rival Inditex, which owns the Zara, Pull & Bear and Bershka brands, posted a big leap in its profits and and sales.

The business saw sales grow 13.5% over the latest half-year to £14.6 billion (€16.9 billion) euros, with growth both in-stores and online.

It came as the retailer slowed down price increases to customers after efforts to reduce cost inflation.

H&M’s update to investors comes ahead of a nine-month financial report set to be released later this month.