No spring in H&M's profits after cold snap
Hennes and Mauritz (H&M) saw its profits plummet once again after unusually cold weather in key European markets brought sales of spring garments down, the Swedish retail giant said Tuesday as it released first quarter results.
Net profits for the three months from January were down 44 percent to 1.37 billion Swedish kronor (135 million euros, $168 million) from 2.46 billion this time last year.
In Germany, H&M's main market, sales were down six percent. In France, the high-street fashion giant's fourth market, they plunged 10 percent.
"The start of the year has been tough," CEO Karl-Johan Persson said in a statement.
"The high level of clearance sales combined with unusually cold winter weather had a negative impact on the sales of the spring garments," he added.
H&M's share price plunged 6.3 percent in Tuesday trading on the Swedish stock market following the earnings announcement, dropping to 119.48 kronor per stock, its lowest level since 2005.
But the company, one of the hardest hit by what analysts have termed the "retail apocalypse" sparked by the online shopping revolution, says it is doing its utmost to ride out the storm.
"2018 is a transitional year for the H&M group, as we accelerate our transformation so that we can take advantage of the opportunities generated by rapid digitalisation," Persson said.
As it teams up with social media giants for a better digital presence, the Swedish group says it expects its online sales to grow more than 25 percent in 2018.
"We take a long-term view that together with our knowledge and experience enable us to navigate through times such as this," Persson added.