(Bloomberg) — Hennes & Mauritz AB said it’s unlikely to hit an operating margin target of 10% this year after a washed-out summer in Europe hurt sales at the Swedish clothing retailer.
Chief Executive Officer Daniel Erver said that after the cold weather in Europe in June, the company saw a pick-up in sales, but warned that “at present we estimate that this year’s operating margin will be lower than 10%.” He also pointed to the continued high cost of living for consumers.
Operating profit for the third quarter came in at 3.51 billion kronor ($350 million), below analyst estimates.
Thursday’s results come amid a strategy shift for the Stockholm-based company under Erver who took over after Helena Helmersson stepped down abruptly in January. He needs to improve H&M’s competitiveness against key rival Inditex SA, whose shares surged earlier this month after it said its third quarter was off to a strong start.
H&M is also facing increasing competition from Chinese upstart Shein and has been recruiting Gen Z celebrities such as Lila Moss fronting the fall-winter 2024 collection in a bid to target a demographic it’s struggled to win over.
Younger consumers aren’t the only people H&M needs to appeal to. In August, analysts at Citigroup Inc. advised clients to sell shares in the Swedish firm and buy those in Zara-owner Inditex.
©2024 Bloomberg L.P.
Source link : http://www.bing.com/news/apiclick.aspx?ref=FexRss&aid=&tid=66f50d97f4ca4a388c8d877ed77ceff5&url=https%3A%2F%2Fwww.bnnbloomberg.ca%2Fbusiness%2F2024%2F09%2F26%2Fhm-says-it-wont-hit-profit-target-after-cold-weather-in-europe%2F&c=17660633804511539272&mkt=de-de
Author :
Publish date : 2024-09-25 23:20:00
Copyright for syndicated content belongs to the linked Source.