H&M has reported its strongest sales growth in three years in the third quarter of the year, boosted by the popularity of the retailer’s summer collection.
Net sales increased 12 per cent, totalling 62.6bn kr (£5.21bn), and were up eight per cent in local currencies, according to H&M’s latest trading update.
Read more: H&M shares rise after spike in summer sales
However, shares in the Swedish firm slipped 2.04 per cent this morning as investors remained concerned over the brand’s profit margins.
H&M, which is the world’s second largest fashion retailer after Zara owner Inditex, said the summer collections were popular and the brand had successfully captured additional market share.
“Well-received summer collections and increased market share confirm that the H&M group is on the right track with its transformation work to meet the customers’ ever-increasing expectations,” the high street giant said in a statement today.
H&M added that activity levels related to its transformation project that is aiming to revive the business were high in the third quarter, indicating that in-store and online investments were weighing on margins.
Michael Hewson, chief market analyst at CMC Markets, said: “Swedish high street retailer H&M shares have been on a slow climb for the last few months on hopes that the worst of its recent problems appear to be behind it.
Read more: H&M shares soar despite profit fall
“Earlier this year the company reported that sales were rising despite profits being sharply lower from a year before.
“The company has been having trouble reducing its high inventory levels and this has raised concerns that it is achieving sales at the expense of its margins.”
Main image credit: Getty