H&M sales worldwide – in local currencies – stagnated in the second quarter, reaching SEK 51.98 billion (US$5.88 billion).
The poor figure was achieved despite a net increase of 303 stores between May 31 this year and the same time last year, taking the network to 4801.
H&M was carrying record levels of inventory estimated at US$4 billion at the end of the first quarter and had to resort to discounting in the second quarter to shift stock.
Analysts were unimpressed by the figure. “It’s worrying,” Magnus Raman, an analyst at Handelsbanken told Bloomberg. He estimated the fall in like-for-like sales over the past year at 6.8 per cent.
“The consensus estimate was already at very low levels and still the company doesn’t manage to meet them.”
“H&M is undertaking a series of turnaround initiatives,” said a Barclays analyst. “Although many of these sound sensible in the longer term, we think they will take time to materialise and continue to view the next 12 months as challenging.”