Get 40% Off
💰 Buffett reveals a $6.7B stake in Chubb. Copy the full portfolio for FREE with InvestingPro’s Stock Ideas toolCopy Portfolio

UPDATE 2-H&M sales miss Sept forecasts; mkt focus on Oct

Published 10/15/2009, 03:10 AM
TTEF
-
ITX
-
SYDB
-

* Sept like-for-like sales down 8 pct vs f'cast 7 pct fall

* Total sales up 1 pct vs 2 pct rise seen by analysts

* Analysts say October will be key month

(Adds analyst comment, background)

By Veronica Ek and Niklas Pollard

STOCKHOLM, Oct 15 (Reuters) - Swedish fashion retailer Hennes & Mauritz blamed warm weather for missing sales forecasts for the second month running in September, putting extra pressure on the company to get tills ringing in October.

The world's third-biggest clothing retailer by turnover said on Thursday that sales at established stores fell 8 percent year-on-year versus the mean forecast in a Reuters poll of 10 analysts for like-for-like sales to drop 7 percent.

It said sales had been affected by the recession and unusually high temperatures in September in most of its markets, but the figures drew a lukewarm response from analysts.

"Another weak month in my opinion," Sydbank analyst Soren Lontoft Hansen said. "Consumers are still focusing on pricing, and a lot of mid and high-price competitors are lowering prices and may be taking some customers from H&M."

"Going forward I don't think we'll see these discounts. They will even out, and that will affect H&M in a positive way.

At 0702 GMT, H&M shares were down 1 percent against a 0.3 percent gain in the DJ Stoxx European retail index and a 0.1 percent rise in the Stockholm bourse's blue chip index.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

The company said "sales were satisfactory where the weather conditions were more normal."

Total sales were up 1 percent, undershooting a forecast for a 2 percent rise. H&M only gives round numbers for monthly sales and does not give currency figures.

H&M saw its shares hit last month after reporting a weaker-than-expected 11 percent fall in like-for-like sales in August, eclipsing unexpectedly strong quarterly profit unveiled the same day.

The company said unusually warm weather in parts of its key European market had been partly to blame then as well, but retail data has also inspired caution with German retail sales falling unexpectedly in August.

"It looks like the weather shifted in early October, so that will be a key month," Evli Bank analyst Anders Wiklund said.

"If it comes in a strong figure, September will be forgotten. If it is a weak figure we will have to begin revising our estimates."

A low-cost focus and geographical spread helped H&M and Spanish rival Inditex, Europe's biggest clothing retailer with its Zara chain, weather the worst of the market doldrums better than mid-market rivals such as Britain's Marks & Spencer and Next.

H&M, which last month signed up French designer Sonia Rykiel for its next two collections in the latest of its big-name partnerships aimed at helping the brand reach more upmarket shoppers, has over 1,800 shops in more than 30 countries.

(editing by John Stonestreet)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.