H&M recorded its worst sales growth for three years as the fashion retailer was hit by the strength of the dollar.
The Swedish fast-fashion group posted pre-tax profits of SK7bn (£576.8m) in the three months to 31 March, a drop of 17 per cent compared to the same time last year.
The company plans to open around 425 new outlets this business year, expanding for the first time into Puerto Rico, New Zealand and Cyprus.
Measured in local currencies, H&M's sales in the UK were one per cent higher, and seven per cent higher in the US, but sales were flat in Germany, which is the clothing store's biggest market.
Why it's interesting
Chief executive Karl-Johan Persson said: "Profits in the second quarter have been affected by a continued negative US dollar effect."
H&M buys much of its materials in dollars and the currency's strength has been pushing up costs at the high street chain.
The company, which operates in many countries across the globe, has blamed the weather for its troubles - a frequent claim made by high street retailers - saying that an unseasonably chilly March and April hit sales.
What H&M said
The sales increase in March and April was significantly below our plan. These two months were negatively affected by cold spring weather in many of our markets.
Is has been a challenging half-year for fashion retail in many markets, but we have great confidence going forward and are continuing to develop our offering further within all our brands.
Although e-commerce is growing fast, there is still great potential for the H&M group to continue to expand through physical stores - so for us, our continued focus is to grow both through physical stores and online, as well as to integrate these two sales channels.