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Mild weather pushes H&M's November sales below forecast
[STOCKHOLM] Hennes & Mauritz (H&M), the world's second-biggest fashion retailer, has reported a smaller than expected sales rise in November in local currency terms, as unusually mild weather weighed on its business on both sides of the Atlantic.
Sales rose 4 per cent from a year earlier, lagging a mean forecast for a 9 per cent rise in a Reuters poll of analysts.
The Swedish retailer said in a statement sales were negatively affected by unseasonably mild weather in North America and many of its large markets across Europe.
Societe Generale analyst Anne Critchlow said concerns were growing in the market regarding the H&M's margin prospects. "We are holders (of the stock) and would not consider buying the shares at this stage, given the uncertain margin outlook for 2016 and ongoing sales disappointments compared to estimates," Ms Critchlow said, adding traders suggested H&M shares could ease by between 2 and 3 per cent on Tuesday.
H&M's biggest rival Inditex said last week sales in local currency terms increased 15 per cent from Nov 1 to Dec 3, despite the mild weather.
H&M's net sales in September through November, the company's fiscal fourth quarter, totalled 48.7 billion Swedish crowns (S$8.1billion), up from a year-ago 42.6 billion but below the mean forecast of 49.6 billion.
H&M, due to publish its full fiscal fourth-quarter earnings on Jan 28, said its total number of stores was 3,924 at the end of last month, an increase of 413 from a year ago.