H&M Sales Growth Falls Short

by webmaster

In a quarter where profitability took center stage, H&M, the Swedish retail chain, disappointed investors with its lackluster sales growth. As a result, H&M’s stock (HM.B) plunged by 4% in early trading, although it has seen overall gains of 47% this year.

H&M’s fiscal third-quarter sales in local currencies were described as “flattish,” failing to meet analyst predictions of a 5% increase. However, the company remains hopeful as it moves in the right direction to achieve its goal of a 10% operating margin next year. This quarter, the focus was on prioritizing profitability and managing inventory levels.

Analysts at RBC attribute the lower sales partly to unfavorable weather conditions. Additionally, H&M faced higher costs this season, leading to prices that are only 10% below average in the UK, compared to the typical 20%. Conversely, its competitors such as Inditex (ITX), Primark (a unit of Associated British Foods ABF), and Next (NXT) have reported stronger sales growth.

Despite tech stocks suffering losses, the broader European market exhibited positivity. ASM International (ASM) shares dropped by 5%, while ASML Holding (ASML) saw a 2% decrease. On the other hand, the French CAC 40 (FR:PX1) experienced a noteworthy rise of 1.3%, closely followed by the UK FTSE 100 (UK:UKX) and German DAX (DX:DAX).

In other news, Stellantis (STLAM) encountered a minor setback with a 1% decline in shares. Simultaneously, the United Auto Workers initiated strikes at an Ohio plant, as well as plants belonging to Ford and General Motors, which are part of the Big Three automakers.

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