PARIS — H&M blamed the climate.
In a short buying and selling be aware, the fast-fashion behemoth reported “flattish” internet gross sales in fixed foreign money for the three months from March 1 to Might 31, in comparison with the identical time interval final 12 months.
“Gross sales within the second quarter have been affected by unfavorable climate circumstances in comparison with the corresponding interval final 12 months on a number of of the H&M group’s giant markets,” the corporate stated in a press release.
Internet gross sales in Swedish kronor have been up 6 % to 57.6 billion Swedish crowns, or 4.95 billion euros.
Enterprise is choosing up with June “off to an excellent begin,” the group stated, which additionally operates the Arket, Cos, Monki, & Different Tales and Weekday manufacturers along with its H&M cornerstone shops.
The inventory jumped almost 7 % in morning buying and selling. Shares completed the day up 3.67 % at market shut.
RBC Europe analyst Richard Chamberlain highlighted that constructive be aware, including that the third-quarter outcomes must be boosted by “hotter climate and constructive calendar impacts.”
The corporate is struggling to discover a candy spot between its go-to fundamentals and high-end designer collaborations, Chamberlain famous. “We expect it can attempt to elevate its provide with out compromising its worth for cash credentials, however this will improve execution danger,” he added.
The corporate took a major hit from closing its Russian enterprise, which continues to have a long-lasting impression on its outcomes year-over-year.
H&M is working to enhance its on-line and offline integration, as rivals resembling Inditex’s Zara and Mango give attention to omnichannel improvement. Inditex beat market expectations in outcomes reported June 7, with internet gross sales up 13 % within the first quarter.
The corporate ought to profit from elevated provide chain stability transferring ahead. “We expect product move has improved, and we count on worth reductions from Asia suppliers because of a softer world purchase,” added Chamberlain.
H&M will report full monetary outcomes for the primary half of the 12 months on June 29.