H&M sales slow but Zara owner ups profits
Budget fashion retailer Hennes & Mauritz has seen its sales growth reduce to 2 per cent in May, less than half the level analysts had expected.
H&M, the world’s second-biggest clothing chain with around 2,300 stores in about 40 countries, said its turnover in the March to May quarter, was up two per cent to 27.6bn Swedish Krone, excluding VAT.
Analysts had expected sales growth of 5.4 per cent, and a turnover figure of about 28.4bn krone.
However, Zara owner Inditex, the world’s biggest clothing retailer, outperformed in the quarter, delivering a ten per cent rise in profit as it rode the back of strong emerging markets demand.
Inditex said net sales rose 11 per cent to €2.96bn (£2.6bn) from February to April, its fiscal first quarter, and continued at that rate up to June 12.
Inditex has suffered less than H&M because it buys a larger proportion of its garments in Europe and north Africa, where wage increases have been much lower than in Asia, and because of a stronger presence in fast-growing emerging markets.
“A good set of results from Inditex. A bit more worrying from Hennes,” said Santander analyst Rebecca McClellan, who has an “overweight” rating on Inditex shares and an “underweight” recommendation on H&M.