H&M shares tumble as sector uncertainty outweighs sales growth
H&M today reported a rise in sales in the three months to the end of November, but saw its shares tumble amid doubts about the company’s recovery.
The Swedish fashion brand said sales rose 12 per cent year-on-year to 56.4bn Swedish krona (£4.9bn). But the positive trading update did little to prevent a fall in H&M’s share price, which was down almost eight per cent.
The retailer has faced falling profits due to high street difficulties and a problem with its new logistics system.
Pre-tax profits in the three months to the end of September were down 20 per cent on the year before to 4.01bn Swedish krona.
But the trading update failed to settle investors’ nerves, as the company gave no further details and said it will release a full-year report at the end of January.
The retail sector has suffered a taxing day after British fashion firm Asos issued a profit warning.
“There is some pessimism that these sales may well have been achieved at the expense of heavy discounting,” said Michael Hewson, chief market analyst at CMC Markets.
H&M’s second-largest shareholder, Harris Associates, has trimmed down its stake in the company in recent months, as Swedish tycoon Stefan Persson has bought up millions of shares.
The Persson family, who founded H&M in 1947, now owns roughly 51 per cent of the company.