UPDATE: H&M March Same-Store Sales -3%, Misses Expectations
April 15 2009 - 4:17AM
Dow Jones News
Hennes & Mauritz AB (HM-B.SK) Wednesday posted March sales
below expectations, though the broader fashion retail market is
showing tentative signs of recovery in some of H&M's key
countries.
"It was clearly below expectations," said Anders Wiklund, a
retail analyst with Evli Bank in Stockholm.
At 0732 GMT, the company's shares were down 7 Swedish kronor, or
2%, at SEK340.50, slightly underperforming a 1.7% decline for the
OMX index of the 40 biggest Nordic companies. Since the start of
the year, H&M's shares are up 12%, compared with a 1.9% rise
for the OMXN40.
Sweden's H&M, the world's third-largest fashion chain by
revenue behind U.S.-based Gap Inc. (GPS) and Spain's Inditex SA
(ITX.MC), said March same-store sales fell 3%.
Eight analysts polled by Dow Jones Newswires on average had
forecast sales in stores open longer than a year to fall 0.3%.
H&M's total sales, which include sales in new stores, rose
6%, missing analysts' forecast of 9.6%.
Wiklund said that factors that hurt H&M in March may include
it being pressed by rivals to sell clothes at a discount, and
colder weather than in March 2008.
"You don't buy spring clothes if it's cold," he said. "It can be
enough that pay weekend is cloudy and the company will lose some
percentage in sales."
He also said there may have been a "negative Easter effect."
Easter took place in March 2008 but in April of this year,
potentially making the comparison figures this year tougher.
Analysts say that the Easter holiday tends to boost sales in some
countries and hurt sales in others.
Global fashion retail sales have struggled in recent months as
increasingly cost-conscious consumers have reined in spending.
However, in Germany, H&M's biggest market - where it
generates a quarter of its revenue - overall clothing sales fell
only 1% in March, a stark improvement over the 11% drop in
February, according to industry journal Textilwirtschaft.
In Sweden, H&M's third-biggest market, March overall
clothing sales fell 1.8%, according to the Swedish Retail
Institute, up from a 4% drop in February.
J.P. Morgan said in a statement that "H&M's sales are likely
to have been dragged down by weaker sales in the Nordic region, the
U.K. and the U.S."
Evli Bank's Wiklund said he expects the broader fashion retail
market to stay negative through 2009.
The number of H&M stores as of March 31 totaled 1,767, up
14% from 1,546 a year earlier.
H&M later this month will start selling the new spring
collection created by Britain's Matthew Williamson, the latest in a
string of famous guest designers hired by the company to boost
sales. H&M plans to introduce his spring collection for women
April 23 in about 200 stores, followed later by a broader
collection in nearly all stores.
Company Web site: http://www.hm.com
-By Ola Kinnander, Dow Jones Newswires; +46-8-5451-3097;
ola.kinnander@dowjones.com