H&M’s share price tumbled 12.5% as it revealed that sales are expected to fall 6% in June due to “unstable weather”.
It comes despite the new CEO Daniel Ervér hailing its “best results for many years” in its second quarter.
The fashion giant’s sales inched up 1% over the first half to 31 May – on the back of 3% growth in its second quarter – and gross profit increased 8.9% to SEK 61,224 m (£456m).
H&M highlighted that its June performance was set against strong comparatives in 2023. It also flagged that sales have recovered as the weather normalised at the end of the month and that a “well-composed inventory” has enabled a later start to sale.
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The retailer offered fewer discounts in June as it has prioritised profitability over sales volumes in order to reach its 10% operating margin target.
However, Ervér – who took the helm of the Swedish fashion behemoth earlier this year – said it was “guiding for slightly higher reductions because we see a need to activate the customers”.
Despite the weaker June, Ervér was confident about the future. “We are now raising our ambitions further to strengthen the brand, the customer offering and the shopping experience.
“With a focus on our customers, committed colleagues and a faster pace of investment in the second half of the year we see good conditions for continued profitable, long-term and sustainable growth,” he said
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