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STOCKHOLM, June 15 Sweden's H&M
reported slower than expected sales in May, the latest in a
string of soft sales numbers from the world's second biggest
fashion retailer, and said it had faced tough conditions in many
of its markets early in the month.
After decades of strong growth, H&M has repeatedly missed
sales forecasts over the past year while earnings have come
under pressure from heavy investment and stiff competition from
budget rivals and new online players.
H&M, second in size only to Zara owner Inditex,
reported a 4 percent year-on-year rise in local currency sales
for the month of May, missing a mean forecast for growth of 6
percent seen in a poll of analysts.
"In the first half of the month sales were affected by tough
market conditions in several countries," the retailer, which is
controlled by the founding Persson family, said in a statement.
"Sales improved considerably in the second half of the month."
Inditex has outperformed H&M and other rivals over the past
few years on the back of online growth and its flexible
fast-fashion model. But while the market leader this week posted
a 18 percent rise in first-quarter profit, it too saw sales
growth slow slightly over the past month.
H&M shares are down 16 percent this year, sharply
underperforming a 9 percent rise for Inditex.
"H&M has disappointed market expectations on sales trends
for many months now," Societe Generale analyst Anne Critchlow
"The young value fashion market, in which the H&M concept
operates, is very difficult, as we have seen from recent reports
of sales and profit declines at chains in the UK, such as New
Look and Arcadia."
May is the final month of the group's fiscal second quarter
and H&M said net quarterly sales reached 51.4 billion Swedish
crowns ($5.91 billion) for the period, up from a year-ago 46.9
billion but short of the 51.9 billion seen by analysts.
($1 = 8.6952 Swedish crowns)
(Reporting by Niklas Pollard and Johannes Hellstrom; Editing by