Hennes & Mauritz AB, Europe’s second-largest clothing retailer, reported a slump in March revenue as freezing weather delayed sales of spring clothes.
Total sales last month dropped 4 percent compared with the same period a year earlier, the Stockholm-based company said in a statement today, missing the average estimate in an SME Direkt survey for a decline of 2 percent. Revenue at stores and operations open at least a year fell 12 percent, compared with the 11.2 percent consensus estimate.
Unusually cold weather and snowstorms in many markets weighed on sales of spring fashions, H&M said, adding that below-average temperatures have continued into April. H&M’s same-store sales have declined for six straight months, while price cuts designed to stoke demand have eroded profitability.
“I’m not sure the development in April and May can close the gap of what they lost in March,” said Soeren Loentoft Hansen, an analyst at Sydbank A/S in Copenhagen. “There is a shorter period of time to sell spring garments.”
H&M fell 0.4 percent to 227.9 kronor at 9:46 a.m. in Stockholm trading. The shares have gained 1.5 percent this year.
The number of outlets rose to 2,853 as of March 31 from 2,517 a year earlier. H&M is set to open 350 stores this year.