H&M hurt by gloomy consumer sentiment

 
City A.M. Reporter
Profit after tax at H&M rose marginally to SEK3,622m (£339m) in the third quarter, as gloomy consumer sentiment, bad weather and negative currency swings weighed on the world’s second-largest clothing retailer.

Group sales including VAT at H&M, which has more than 2,600 stores across 44 markets, increased 10 per cent in local currencies. Pre-tax earnings hit 4.9bn Swedish crowns in the three months to August, compared with 4.85bn crowns last year.

But negative currency effects shaved SEK200m off profit year on year.

In Europe, where H&M has the largest part of its business, many retailers are struggling as consumers rein in spending in the face of rising unemployment and government cutbacks.

"Conditions in the fashion retail industry continued to be challenging in many markets – both as regards the weather and the macro-economic climate," the company's chief executive Karl-Johan Persson said in a statement.