H&M posts weaker-than-expected Q1 sales

(Sharecast News) - Swedish fashion retailer H&M reported weaker-than-expected first quarter sales amid continuing sluggish demand for its clothing range and increased discounting. Sales for the three months to February 28 rose 2% to 55.33bn Swedish krona, compared with the 55.86 billion forecast by analysts.

"Our sales and earnings in the quarter were somewhat weaker than planned - but the first quarter is the smallest quarter of the year for us in terms of sales and margin, and we are confident going forward," said chief executive Daniel Erver.

Operating profit came it at SEK 1.2bn against expectations of SEK 1.9bn. H&M cited "negative external factors, increased markdowns and investments in the customer offering" which hit gross margins.

However, Erver said these factors were "estimated to already be significantly smaller in the second quarter".

Reporting by Frank Prenesti for Sharecast.com