H&M’s sales this month are set to fall by 10% as the late burst of hot weather cooled interest in the rollout of its Autumn/Winter line.
The fast fashion giant said “unusually hot weather in several of the company’s European markets” hit sales, as temperatures in London hit 33 degrees. Roughly four percentage points of decline, it said, could be explained by its exit from Russia, but it suggested that temperature was the main reason for the rest.
It follows “flattish” revenue over the Summer. Profits during the period, however, grew, as H&M successfully trimmed costs.
H&M, like most fast-fashion retailers, has been working to up its profit margins as weak consumer confidence makes high=volume sales more difficult. Last week, the business started charging for returns, in an attempt to discourage shoppers from buying an item, often on credit, wearing it once and then bringing it back.
CEO Helena Helmersson said: “The focus during the quarter has been on profitability and inventory efficiency, resulting in strong cash flow and good profit development. We are taking further steps towards our goals and creating conditions for profitable growth over time.”
A buyback helped shares rise 3.2% in Stockholm to SEK160 (£12.19). They’re up 37.7% for the year, in contrast with London-listed fast-fashion firms like Boohoo and Asos which have seen shares slide.
Yesterday, ASOS revealed that its profits would be at the bottom end of its forecast range as sales slid by 15%, though it also reported an improvement in its profit margins per order.
