H&M Group has reported slightly lower than expected growth for its second quarter, as discounts impacted sales during the Swedish giant’s attempts to reduce its record level of inventory.
Local currency sales including VAT during the period ending May 31 were unchanged year-on-year. A mean Reuters poll had forecast for a 0.5 per cent increase.
Meanwhile, revenue excluding tax rose 1.2 per cent to 51.9 billion kronor (£4.48 billion), which also missed the average analyst estimate of a three per cent rise to 53 billion kronor.
H&M did not reveal like for like sales, while its profit figures for the second quarter are yet to be announced.
While its store count has grown from 4498 this time last year to 4801, H&M has said it plans to slow down its store expansion scheme.
The company’s target is 220 net additions in 2018, based on 170 store closures and 390 new openings.
The trading update from the Stockholm-based company, which owns Arket, Cos, Weekday and the eponymous H&M fascias, promoted its to fall as much as 4.1 per cent in early trading.
The news follows H&M’s first quarter update, which saw a pre-tax profit drop of 60 per cent year-on-year to 1.26 billion kronor (£108 million) and a 1.7 per cent dip in sales to 53.5 billion kronor (£4.6 billion).
Just yesterday, H&M officially opened its first store for new discount fashion fascia Afound in Stockholm, and in April it launched Nyden.