The Swedish H&M Group has had a weak summer, with sales down 4 % in local currency. Customers responded better to the autumn collections, but the Swedes still fail to beat rival Inditex.
The past third quarter was weaker than expected for H&M Group. Although net revenue rose 3 % to 57.5 billion Swedish kroner (about 5.4 billion euros), in local exchange rates it was down 4 %. Turnover was also below the 5 % growth expected by analysts, according to Reuters.
“The third quarter had a weak start, as did the industry in many of the group’s most important markets,” H&M said in a statement. “Sales improved during the quarter, with a better start to autumn collections than last year.”
Change in atmosphere
Major rival Inditex, however, did a lot better over the summer period. From May to July, the Spanish group achieved 16 % sales growth in constant currency, although that growth slowed to 11 % between August and mid-September. However, the Zara owner benefited from early price hikes, when consumers were still keen to catch up after the pandemic and bought new outfits for travel or the office.
Now, consumers are again keeping a much tighter rein on their spending, as Primark too recently admitted. The Irish budget fashion chain even promised it would not raise prices in the next financial year, however much that might cost the company in margin. On 29 September, H&M will publish its profit figures for the quarter.