Hennes and Mauritz’s sales were unchanged in the second quarter as the struggling Swedish clothing retailer offered discounts to try to reduce a record level of inventory.
Sales were unchanged in local currencies, including value-added tax in the three months through May, the Stockholm-based company said in a statement Friday. Revenue excluding tax rose 1.2 per cent to 51.9 billion kronor (€5.3 billion), missing the average analyst estimate.
H&M's report comes three days after Zara parent Inditex reported weaker-than-expected sales in its first quarter. European clothing retailers had suffered from unusually cold weather in the first months of this year. Brick-and-mortar shops have also been facing increasing competition from online sales as consumers become more comfortable receiving clothes in the mail and returning them if they don't fit.
H&M has struggled to keep up with its competitors after fashion mistakes and delivery hiccups have made customers turn elsewhere. The company reported a record level of inventory exceeding $4 billion at the end of the first quarter despite increasing markdowns.
H&M said it had 4,801 stores at of the end of May, 6.7 per cent more than a year earlier.
The stock fell 2.7 per cent Thursday after Swedish news website Breakit reported that Chairman Stefan Persson said that speculation that he's planning to take the fashion retailer private are "baseless". – Bloomberg
