H&M has posted a 5% increase in full-year sales to SEK244.3bn – but shares tumbled by 7% in morning trade to SEK145.14 per share amid concerns over the retailer’s recovery.

In its sales update for the full year, issued today (17 December), the Swedish apparel retailer said that excluding VAT, full-year sales grew to SEK210.5bn. For the fourth quarter ending 30 November, sales including VAT rose to SEK65.5bn, up 6% on the year-ago period.

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In September, H&M posted a nine-month profit fall to SEK9.1bn compared to SEK12.19bn a year earlier, which it blamed on costs as a result of problems arising as it implemented new logistics systems. The new systems, it said, were essential to make its supply chain faster, more flexible and more efficient, and to continue the integration of stores and online.

“The rapid changes in the fashion industry are continuing and the H&M group is in an exciting transitional period,” explained CEO Karl Johan Persson at the time. “Our transformation work has contributed to a gradual improvement in sales development with increased market share in most markets during the third quarter, particularly in Germany, Sweden, Eastern Europe, Russia and China.”

Last month the group announced it would be closing its Cheap Monday brand following a long succession of negative sales and earnings. The owner of the Cos, Arket and Monki brands said the move will allow it to prioritise its core business. Around 80 employees in Sweden are expected to be affected by the closure.

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Analysts at Jefferies told Reuters there was still a “lack of compelling evidence that the recovery journey is now truly underway,” adding that a full assessment of progress would have to await the end-of-year figures, which are due at the end of January.

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