H&M Q3 sales up but warm weather hits August growth
Unseasonably warm weather impacted H&M's August sales growth
Swedish fashion giant H&M booked a double-digit rise in third-quarter sales, while August saw its weakest growth in more than two years.
During the three months to 31 August, sales, including VAT, increased by 11% in local currencies.
Converted into SEK, sales, including VAT, for the quarter grew 18% to SEK53.42bn (US$6.48bn) from SEK45.26bn in the same period of last year. Excluding VAT, sales were up 19% to SEK46.02bn from SEK38.81bn a year ago.
H&M blamed the weakness of the Swedish krona for the substantial difference between the sales increase in local currencies and in SEK.
For August, group sales, including VAT, climbed 1% in local currencies, but were negatively affected by the unseasonably warm weather in many of H&M's main markets in Europe.
This is down from the 16% rise the retailer reported for July, which marked its 10th consecutive month of double-digit increases. However, tt also marked H&M's weakest monthly sales performance since March 2013, when sales fell 4% year-on-year.
Stifel analyst Richard Jaffe said: "We believe H&M, along with its value priced European competitors, increased promotions in August in an attempt to drive traffic. This likely pressured third-quarter gross margin."
The owner of the H&M, Cos, Monki, Weekday, Cheap Monday, and & Other Stories banners, operated 3,675 stores at the end of August, up from 3,341 last year.
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