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Oct 15, 2008
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H&M Sept same-store sales sag as crisis weighs

By
Reuters
Published
Oct 15, 2008

STOCKHOLM, Oct 15 (Reuters) - Swedish fashion giant Hennes & Mauritz reported on Wednesday a 2 percent year-on-year fall in sales at established stores in September as the growing crisis in the financial sector weighed on consumer spending.

The average forecast of 10 analysts was a 2.5 percent fall, according to a Reuters survey. H&M only gives round numbers for sales and does not give currency figures.

Total sales for the month were up 10 percent against a forecast of a 9.1 percent gain.

"It was a positive surprise," Christian Nagstrup, analyst at Jyske Bank, said. "In the third-quarter report they said that sales up to the 28th September had gone up 9 percent. So the last few days nudged the figure a bit in the right direction."

The company does not usually give any commentary with the figures.

The retail environment has deteriorated in recent months as a global financial crisis deepens.

While H&M and Spain-based rival Inditex have weathered the better than some due to their price-conscious fashion focus, they are also feeling the squeeze.

In its report for the first half, Inditex said it saw no significant risks or uncertainties in the second half. It also stuck with a forecast for 4 percent like-for-like sales growth. Analysts, however, said this would be tough to achieve with just a 1 percent rise in same-store sales in the first half.

H&M's third-quarter pretax profit undershot expectations as the company was forced to make bigger discounts than the previous year. It also pointed to higher transport costs and higher prices in the countries where its clothing is produced. (Reporting by Simon Johnson; editing by Sue Thomas)

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