Swedish fashion retailer H&M has had a weak start to the third fiscal quarter, with sales in June expected to be 6% below the previous year's level in local currencies, the company announced on Thursday in Stockholm.
Bad weather at the beginning of the month in many of H&M's large markets had particularly impacted business, the company said. Additionally, the sales figures in June 2023 had been comparatively high.
Nevertheless, new H&M chief executive Daniel Ervér is sticking to his annual target, aiming for an operating margin of 10% in 2024.
"However, the conditions for achieving that level this year have become more challenging," Ervér noted in a statement.
He pointed to more expensive materials and unfavourable exchange rates, which are likely to have a stronger negative impact on revenue in the second half of the fiscal year.
In the second fiscal quarter, H&M also disappointed. Net sales rose by 3% to 59.6 billion Swedish kronor ($5.6 billion). Operating profit climbed from 4.7 billion kronor in the same period last year to 7.1 billion kronor.
After taxes, H&M earned just under 5 billion kronor, which is 52% more than a year ago.