H&M shares dive after warning ‘unstable’ weather will hit sales

Swedish fashion retailer H&M reported an increase in revenue and profit in the second quarter of this year, but warned that sales for June are likely to be impacted by poor weather. 

H&M group’s net sales increased by three per cent in the second quarter to SEK 59.6bn (£4.4bn), while gross profit rose by 11 per cent to SEK 33.5bn.

Net sales were also up over the first half of the year, rising by one per cent to SEK 113.2bn, with gross profit for the period nudging higher to SEK 61.2bn. 

Operating profit for the period increased to SEK 9.2bn, the firm added. 

However, the brand said that sales were set to decrease by six per cent for June compared to the same month last year. 

H&M said that the June figure “is to be seen in the light of strong comparative figures from 2023” and said that “the unstable weather in many of the H&M group’s large markets at the start of June 2024 had a negative impact on sales”. 

But it said that June sales have recovered slightly “as the weather normalised at the end of the month”. 

Markets reacted badly to the warning, with the group’s share price falling over 13 per cent this morning. 

Chief executive Daniel Ervér said the group’s profitability performance during the first half of the year was “a result of gradual improvements in sales development, a strengthened gross margin and continued good cost control”.

“The spring and summer collections have been very well received, which is reflected in the improved sales in the second quarter,” he added. 

Ervér said that while “the situation in the world around us remains uncertain and households continue to have high living costs”, he hoped that the firm’s focus on customers and “a faster pace of investment in the second half of the year” would mean “good conditions for continued profitable, long-term and sustainable growth”.