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H&M profits sink amid weak sales | |
(about 1 hour later) | |
Swedish fashion giant H&M - the world's second-biggest clothing chain - has posted a 61% profit fall for the three months to February amid weak sales. | |
Its outlets, which include mid-market chains & Other Stories and Cos, made 1.26bn Swedish crowns (£108m). | |
Recently it warned of weaker demand in some stores and also said sales had fallen for the second quarter in a row. | |
It said higher levels of stock would mean greater price discounting in the next three months. | |
Shares fell 5% in early trading to their lowest level since 2008. | |
H&M employs 171,000 people worldwide in its 4,700 stores. | H&M employs 171,000 people worldwide in its 4,700 stores. |
It has outlets in 69 countries, with the US, Germany and the UK its top three markets by number of stores. | |
This year it is planning to open 220 new stores. Most will be H&M stores, but 90 will be its newer spin-offs including & Other Stories, Cos and Monki. | |
The company said stock levels rose by 7% in the quarter, compared with last year, partly thanks to its continuing expansion, but also because of weak sales in the previous quarter. | The company said stock levels rose by 7% in the quarter, compared with last year, partly thanks to its continuing expansion, but also because of weak sales in the previous quarter. |
H&M said that rise was higher than planned, and would mean "increased markdowns" in the second quarter of 2018 compared with last year. | H&M said that rise was higher than planned, and would mean "increased markdowns" in the second quarter of 2018 compared with last year. |
However, the retailer said it expected sales and profits to return to growth. "We take a long-term view that, together with our knowledge and experience enable us to navigate through times such as this... back to healthy growth in both sales and profitability." |