H&M reassures on recent sales as profits drop after chilly spring

City A.M. Reporter
H&M, the world’s second-largest fashion retailer, yesterday posted a sharp rise in sales since the start of June, driven by demand for full-price items from its new collections rather than discounted older items.

The June performance helped offset a greater than expected drop in quarterly earnings at H&M, which like other fashion firms has been squeezed by weak consumer demand in its main European markets and chilly spring weather.

The Swedish firm, whose biggest rival is Zara-owner Inditex, said sales rose 14 per cent in local currency terms in the first 17 days of June compared with the same period a year ago, helped by its summer range featuring imitation leather biker jackets and chiffon blouses.

Pre-tax profit in March through May fell to 6.1bn Swedish crowns (£604m) from 7.05bn crowns a year earlier. H&M said markdowns dragged down its gross margin in the quarter to 61.1 per cent from 61.7 per cent a year earlier.