UPDATE 1-H&M May comparable sales flat amid European gloom
* Like-for-like sales flat pct vs consensus +1 pct
* Total including new stores +9 pct vs consensus +11 pct
* Q2 sales 31.6 bln SEK vs forecast 32.2 bln
* Says negative currency effect was substantial in Q2 (Adds detail, background, Inditex result)
STOCKHOLM, June 12 (Reuters) - Hennes & Mauritz, the world's second-largest fashion retailer, posted on Wednesday unchanged May same-store sales, as weak spending in its key European market lingered.
H&M said local-currency sales in stores open at least a year were unchanged from a year earlier, just lagging a mean forecast in a Reuters poll of analysts for a 1 percent rise.
In April, they had been up for the first time since September, helped by a weak year-earlier comparison.
Apparel firms have faced tough times in Europe as the economic downturn and uncertain outlook make consumers hold on tighter to their wallets, and H&M has seen competition toughen in its low-price segment.
Unusual chill in recent months has also left spring collections on the racks, which increases the risk of markdowns. That would hurt profitability at H&M, which has already seen margins fall due to currency swings and long-term investments.
With some 80 percent of revenues in the region, H&M has been hit harder than bigger rival Inditex which has grown more aggressively in emerging markets.
H&M's total sales in May - the last month of its fiscal second quarter - were up 9 percent in local currencies, below a forecast 11 percent.
H&M did not comment on the monthly figures.
Net March-May sales, which H&M unveiled ahead of the full quarterly report due on June 19, were roughly unchanged from a year before at 31.6 billion crowns ($4.8 billion), against a forecast for a rise to 32.2 billion. A strong Swedish crown weighed substantially on the figure, H&M said in a statement.
Inditex, with flagship brand Zara, posted on Wednesday its lowest fiscal first-quarter profit in four years, also hit by cold weather and currency effects.
H&M's shares, which are up 4 percent in the past year, trade at 21.2 times forecast 2013 earnings, below Inditex' 23.9 but above other rivals', according to Thomson Reuters data.
(Reporting by Anna Ringstrom; Editing by Alistair Scrutton)
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