H&M saw its sales flatline in the three months ending 31 August 2023 as the business struggled to keep up with its rival Inditex, which hailed strong sales.
The Swedish retailer said its net sales, in local currencies, were “flattish” year-on-year, missing analyst expectations.
The retailer posted a 6% increase in net sales to £4.38bn for the three months to 31 August, 2023, lagging behind the £4.57bn forecast by analysts.
Subscribe to Retail Gazette for free
Sign up here to get the latest news straight into your inbox each morning
The group, which also owns Arket, Cos, Monki, & Other Stories, and Weekday has struggled to match the sales growth at its Spanish rival Inditex.
While H&M has found it challenging to effectively pass rising costs onto consumers, Inditex raised prices early and heavily invested in marketing to promote its Zara brand.
The Spanish giant’s sales across all of its brands, including Zara, Pull & Bear, Massimo Dutti, Bershka and Stradivarius, grew 13.5%, hitting £14.5bn.
“The work towards the company’s goal of reaching a 10% operating margin in 2024 is going in the right direction,” the group said in a statement.
“Profitability and inventory levels have been prioritised in the quarter.”
H&M is due to publish a full nine-month trading report on 27 September 2023.
Earlier this month the retailer revealed it would be bringing its pre-loved shopping experience to the UK as it ramps up its sustainability efforts.
The range will be available in its London flagship on Regent Street store from 5 October, allowing consumers to pick up second-hand pieces from a range of brands and designers.
Click here to sign up to Retail Gazette‘s free daily email newsletter
