Analysts in a Reuters poll had forecast a drop of 6 percent in like-for-like sales. Estimates for the decline were in a 5-7 percent range.
Total sales – including from newly opened stores – rose three per cent in local currencies versus the poll average of a 2.8 percent rise. H&M had previously said sales grew three per cent percent from 1-27 September, hurt by warm weather and weak consumer confidence.
H&M is often seen as better positioned to weather a downturn than many peers, thanks to its geographic spread and low-price profile. But it has seen earnings fall for four straight quarters, squeezed by a spike in input costs and the strong crown.
It suffered a smaller profit decline than forecast in June through August, its fiscal third quarter, when pretax earnings reached 4.9 billion Swedish crowns (469 million pounds) compared with a Reuters poll forecast of 4.7 billion.
H&M sales from comparable stores were flat in August compared with a year earlier.
The world's no. 2 fashion retailer, with more than 2,300 stores in 41 countries, said in September it would speed up its expansion and open 265 new stores in its fiscal year 2010/11, compared with an earlier forecast for 250 new outlets.