H&M’s Q1 sales weaker than expected

H&M’s Q1 sales weaker than expected

The operating profit margin fell to 2.2% from 3.9% in the same period a year ago, says the Swedish fast-fashion retailer.

H&M said increased discounting and marketing investments impacted its profitability in Q1. (EPA Images pic)
LONDON:
Swedish fast-fashion retailer H&M reported weaker-than-expected sales for its first quarter (Q1) today and said sales were up 1% so far in March, in a sign of a slow start to its spring and summer season.

H&M reported sales of SEK55.3 billion (US$5.52 billion) for the December to February quarter, missing analysts’ mean estimate of SEK55.9 billion.

“Our sales and earnings in the quarter were somewhat weaker than planned – but Q1 is the smallest quarter of the year for us in terms of sales and margin, and we are confident going forward,” CEO Daniel Erver said in a statement.

Increased discounting and marketing investments impacted H&M’s profitability in the quarter, the company said, with the operating profit margin falling to 2.2% from 3.9% in the same period a year ago.

Erver, leading H&M for just over a year, is trying to turn its fortunes around and has ramped up marketing, spending on pop stars like Charli XCX to model its collections as he tries to make the brand more desirable and better compete against Zara and Shein.

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