H&M's share price falls after sales figures disappoint

Helen Cahill
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Holiday Shoppers Look For Bargains On Black Friday
H&M has blamed the weather for its difficulties in 2016 (Source: Getty)
wedish international clothing retailer H&M's share price fell 2.76 per cent in trading today after it reported disappointing Christmas sales figures.

The group's total sales in December rose six per cent year-on-year in local currencies, but analysts had forecast a sales increase of eight per cent.

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H&M said it had opened 422 stores in the year, and that it now has a total of 4,379 outlets. RBC's analyst Richard Chamberlain said the figures implied a like-for-like sales drop of three per cent.

"We think this reflects challenging industry conditions, but also a very weak first half of the month as Black Friday pulled forward more demand than we expected, at a likely lower margin," he said. "We think sales have returned to a more normalised pattern later in the month and so far in January."

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The retailer blamed the weather for its difficulties in 2016, but the company was also hit by the strength of the dollar.

"H&M continues to face challenges in transitioning from a store based roll-out to a global multichannel operator," Chamberlain said. "However it should now be past the worst in terms of sourcing headwinds."

H&M's peer, Inditex, the retail giant behind Zara, has been proving to be a tough competitor due to its strength in sourcing the right clothes for the fast-fashion market. But, Chamberlain said H&M was trading at a "significant" discount to Inditex.

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