A close view of the Red H&M logo illuminated in front of an exhibition of summer dresses for women and relaxed clothing in a retail store.
Cheng Xin | Getty Images News | Getty images
The Swedish giant of H&M clothing reported lower sales on Thursday than expected in the second quarter of tax, but underlined an increase in demand to launch the summer season.
Revenues from the second largest clothing retailer in the world plunged up in annual sliding at 56.71 billion Swedish Krona ($ 5.99 billion) during the period from three months to May. 31, slightly below 57.01 billion Swedish Krona forecasts by LSEG analysts. In local currencies, sales increased by 1%.
The operating profit totaled 5.9 billion Swedish Krona during the quarter, in accordance with expectations.
CEO, Daniel Erver, said that quarter results were “negatively assigned” by higher purchase prices with a more expensive US dollar and higher freight costs.
However, the company noted that sales in June should increase 3% in local currencies, as demand shows signs of recovery during the summer months.
“The negative external factors that have increased the purchase costs for the first half of the year become positive for the second half,” Erver said in a press release accompanying the results.
H&M, which has the United States as its second largest single market and depends strongly on production in Asia – notably China and Bangladesh – has not provided specific details on the impact of American trade rates, but said it was looking at the situation.
“The company closely monitors the developments in the global restrictions on trade and trade. With good flexibility in the supply chain and thanks to the pricing of the customer offer, there are opportunities to adapt the company to modified conditions,” added Erver.
The fashion retailer previously reported a slow start of the year, but underlined an annual increase in sales in March.
H&M.
H&M has faced several consecutive quarters of gentle sales, because it has struggled to fill an extended gap with the rival belonging to Inditex Zara and to repel the increased competition of retailers at a lower cost, such as Shein and Temu.
American prices and low consumer confidence have nevertheless become a brake on the retail sector, Inditex earlier this month displaying weaker than expected quarterly sales and a slower start in the summer in the middle of great economic uncertainty.
Retail and consumption goods have become the most in difficulty in Europe, according to a new report by the law firm Weil, Gotshal & Mance LLP, which cited tight credit conditions, cost inflation and a lower demand for consumers among the pressures on industry.
This is a story in development and will be updated shortly.
