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H&M Says Dollar's Profit Squeeze Won't Lift in First Quarter

  • Shares drop as much as 4.5% after fourth-quarter profit miss
  • Asian sourcing means bulk of purchases are linked to dollar
An employee arranges a clothes rail dislaying garments for sale inside an H&M store in Budapest. The company reported fourth-quarter earnings that missed analysts’ estimates.

An employee arranges a clothes rail dislaying garments for sale inside an H&M store in Budapest. The company reported fourth-quarter earnings that missed analysts’ estimates.

Photographer: Akos Stiller/Bloomberg
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Hennes & Mauritz AB warned it sees no respite from currencies in the first quarter after the dollar’s strength added to purchasing costs and led to fourth-quarter earnings missing analysts’ estimates.

The effect of the greenback’s gains will remain as strong in the first quarter, then progressively diminish, the Stockholm-based company said in a statement Thursday. Pretax profit fell 8.4 percent to 7.15 billion kronor ($839 million) in the three months through November, trailing analysts’ expectations for 7.27 billion kronor. The stock fell as much as 4.5 percent.