H&M's European operations saw a strong September, but the retailer said that the unusually mild October and November have damped down sales as shoppers held off from replenishing their winter wardrobes.

But the company has been buoyed by surprisingly good US sales, even though this only accounts for a small - though growing - proportion of turnover.

"Weather shows that sales were weaker. However, this is only a seasonal thing and very typical for the clothing business, where weather rules," said Rolf Karp, analyst at Swedish brokerage Oehman.

The company's chief financial officer Jan Jacobsen wouldn't comment on data from the Swedish Research Institute of Trade that showed clothing sales were down 6.4 per cent in October from a year earlier, but he did point out that "a warm autumn is generally not good for retailers."

Dresdner Kleinwort Benson has picked up on the observation and downgraded its fourth-quarter earnings estimate following a meeting with the company. The investment bank now sees fourth-quarter pretax profit at SEK1.74bn ($169m), 15 per cent lower than its earlier forecast.

Sales were strong in September, when H&M released third-quarter earnings, and the company at the time indicated that the autumn collection was being well received.

But with H&M's financial year ending in November, the company won't be able to fully use Christmas sales to offset any sluggishness from mild weather in recent weeks.

On a brighter note, Hennes & Mauritz has been buoyed by surprisingly strong US sales, even though the US currently only accounts for just two per cent of total sales. That percentage, though, is expected to grow next year.

"H&M will probably make it in the US, despite the economic cycle. What sells is their trendiness. They have ten stores, and plan another ten before the end of June 2001," said Karp.