H&M shares decline as sales pressured during June due to weather conditions

H&M, the world’s second-largest listed clothing retailer, suffered a drop in its share prices on Thursday, as the company issued a sales warning for June due to bad weather.

According to CNN, the fashion company Hennes & Mauritz expressed, on Thursday, its doubts about achieving the targeted profit margins for the full year after failing to achieve the expected quarterly revenues, and predicted a decline in sales in June.

This caused the company’s shares to decline by about 14%.

The Swedish company indicated that sales this month will likely decline by six percent in local currencies on an annual basis, due to reasons including bad weather conditions in many markets.

H&M CEO, Daniel Erver, said that the company still believes in the possibility of achieving an operating margin of ten percent for the year 2024, but the difficulty of achieving this has increased.

He explained, “External factors affected the cost of purchase and sales revenues, including raw materials and foreign currencies, and they will have a more negative impact than we expected in the first half.”

The Swedish company is facing difficulties in attracting customers again at a time when inflation has reduced the purchasing power of individuals.

The company said that net sales for the second quarter, which extends from March to May, rose 3% in local currencies on an annual basis, indicating positive trends in all regions.

Operating profits recorded 7.1 billion crowns ($672.5 million), up from 4.74 billion a year ago, but were below average expectations of 7.37 billion in a poll of analysts conducted by the London Stock Exchange Group.