H&M has said it is looking to slash costs to the tune of £160m after posting weaker than expected quarterly profit.
The second largest apparel retailer saw its share price sink by almost four per cent on Thursday afternoon, after revealing a cost-cutting blitz in its third quarter results.
For the June-August period, pre-tax profit came in at 689m Swedish crowns, compared to 6.09bn the year prior.
Refinitiv analysts had forecast an average of 2.98bn, according to the Reuters news agency, with H&M missing expectations by quite some way.
Sales were weak in many of the retailer’s major markets at the start of the summer, as households grappled with price increases on energy and grocery bills.
The quarter was heavily impacted by the group’s decision to pause sales and subsequently wind down its business in Russia, H&M bosses said.
Exiting Russia after its invasion of Ukraine earlier this year had had a “significant effect” on sales and profitability, H&M’s CEO Helena Helmersson said, pointing to this as an explanation for “half of the decrease in profits compared with the third quarter last year.”
Business was also impacted by increased raw materials and freight prices, as well as a stronger US dollar, which then negatively impacted quarterly profit.