H&M sees warm autumn weather knock September sales

27 September 2023, 14:24

H&M on Regent Street
H&M sales. Picture: PA

The Swedish fashion group said it expects sales this month to fall by 10% year-on-year in local currencies

High street fashion firm H&M has warned over tumbling sales in September as unusually hot weather across many European markets dented demand for autumn ranges.

The Swedish group said it expects sales this month to fall by 10% year-on-year in local currencies.

While four percentage points of the sales decline is down to the group’s discontinued operations in Russia, it said the drop should be “seen in the light of unusually hot weather in several of the company’s European markets, which has had a substantial negative impact on sales during the month”.

It shows H&M falling further behind its fashion rival, Zara owner Inditex, which recently reported a 14% leap in constant currency sales between August 1 and September 11.

It also follows a recent backlash over its move to start charging £1.99 for returns, prompting the group to clarify in an apparent U-turn that it would only charge for returns online and not in store.

H&M chief executive Helena Helmersson told the BBC there was “improvement to make” in its sizing after customers said inconsistency drove the need to return garments.

The group is improving its size guides for customers in an effort to drive down returns.

But she insisted the retailer had “lower returns than many others”.

H&M reported a leap in earnings over the three months to August 31, at 4.74 billion Swedish krona (£345 million), up from 902 million Swedish krona (£65.6 million) a year earlier, when results were hit by its exit from Russia.

But sales over the third quarter were “flattish” over its third quarter in local currencies.

When translated into Swedish krona, sales lifted 6%, it said.

Retail analyst James Grzinic at Jefferies said H&M’s performance in recent weeks shows current trading is “as pressured as feared”.

Helena Helmersson, chief executive of H&M, said: “Having now moved into September, we can see that the start of the autumn season has been delayed because the month so far has been marked by unusually hot weather in many of our European markets.”

The company said it was on track to reach its goal to increase operating margin to 10% by the end of next year, while Ms Helmersson said the group’s cost-cutting programme was continuing “at full speed”.

Hennes & Mauritz was founded in Sweden in 1947 and is quoted on Nasdaq Stockholm.

By Press Association