High Street fashion retailer H&M has issued a warning about declining sales due to warm weather in September, which has dampened demand for autumn apparel.
Because of the “unusually scorching weather in several of the company’s European markets,” the Swedish corporation anticipates a 10 percent decline in sales compared to the same month last year.
However, this update led to comparisons with Inditex, the parent company of Zara, which reported a 14 percent increase in sales between August 1 and September 11.
Vera Diehl, a fund manager at Union Investment, which holds shares in both H&M and Inditex, commented, “If your competitor’s sales increase by 14 percent despite the same weather, that should tell you something.”
H&M’s update comes a day after Asos reported that wet weather in July and August had hindered its summer clothing sales. Despite the disappointing September update, H&M shares rose by 4%, or 6.3p, to 161p in Stockholm after the company reported a profit increase from £66m to £345m between June and August.
The company remains committed to its goal of increasing operating margins to 10 percent the following year and has stated it will continue its cost-cutting initiative.
