H&M: Sales to drop 10 per cent due to unusually hot September and Russia pull-out
H&M has warned that its sales are expected to decrease by 10 per cent in September, as unusually hot weather and discontinued operations in Russia have dampened trade.
The gloomy forecast puts a damper on the Swedish fashion giant’s latest third quarter update, revealing a six per cent rise in net sales to SEK 60,897m (£45.5m) and a 10 per cent rise in gross profit to SEK 31,015m (£23.2m).
The high street said sales in the third quarter began strongly as consumers showed a “pent up demand” for summer garments following a cold May, however the group said interest slowly faded as the months progressed.
H&M said: “Sales during September 2023 are expected to decrease by 10 percent in local currencies compared with September 2022.
“The discontinued operations in Russia account for four percentage points of the decrease.”
It added: “The figure for September should be seen in the light of unusually hot weather in several of the company’s s European markets, which has had a substantial negative impact on sales during the month.”
Last summer, H&M announced it would withdraw from Russia, following its invasion of Ukraine, at a cost of SEK 2.1 bn (£160m).
In recent months, the company has been trumped by rival Zara owner Inditex whose profits surged 40 per cent for the six months to July. “
Inditex has widened its lead over Swedish rival H&M this year thanks to its ability to deliver fashion trends faster from nearby suppliers at prices that allow it to cope with inflationary pressures.