Hennes & Mauritz AB, Europe’s second-largest clothing retailer, fell to the lowest since June in Stockholm trading after October sales missed estimates.
The shares fell as much as 2.8 percent to 213.5 kronor and were down 2.5 percent at 214.1 kronor at 9:11 a.m. They’ve slid 3.3 percent this year compared with a 5.7 percent increase for Sweden’s benchmark stock index, the OMX Stockholm 30 Index.
Sales at stores open a year or more slid 5 percent last month, H&M said today in a statement. Richard Edwards, an analyst at Citigroup Inc. in London, had anticipated sales on the same basis would be unchanged. Revenue at local currency rates rose 4 percent compared with Edwards’ 10 percent estimate and the 9.3 percent average estimate in an SME Direkt poll.
H&M had reported unchanged same-store sales in the quarter through August and a 6 percent improvement in September. Third-quarter profit missed estimates at the Stockholm-based company as consumers increasingly turn to competitor Inditex SA, owner of the Zara chain.
H&M, which opened its first store in Sweden in 1947, has been slower to diversify than Inditex. Brands other than Zara account for 62 percent of the Spanish company’s outlets and 35 percent of revenue. At H&M, by contrast, the four non-flagship brands -- COS, Monki, Weekday and Cheap Monday -- represent roughly 5 percent of total stores. Next spring, H&M will add a sixth brand, & Other Stories, with about 10 outlets across Europe selling pricier clothing, lingerie and accessories.
“We continue to believe it is suffering from maturity and competition in its core markets and lower returns from its new markets,” Gillian Hilditch, an analyst at JPMorgan Chase & Co., said in a note to clients today. The monthly report was “very disappointing,” she wrote.
H&M said it will report fourth-quarter and November sales on Dec. 17.