* Feb local-currency sales -1 pct yr/yr vs consensus +6 pct
* Dec-Feb sales 47.0 bln SEK vs consensus 48.1 bln SEK
* Weak demand in Germany, H&M's biggest market
* Concerns H&M losing market share amid tougher competition
(Adds detail, background)
STOCKHOLM, March 15 H&M, the world's
second largest clothing retailer, posted a surprise drop in
sales last month, the first such decline in four years sending
its shares 4.5 percent lower.
The Swedish budget fashion firm said on Wednesday
local-currency sales fell 1 percent year-on-year in February,
against a forecast in a Reuters poll of analysts for a 6 percent
That was in stark contrast to bigger rival Inditex
the owner of Zara, which reported earlier on Wednesday a 13
percent increase in sales from Feb. 1 to March 12.
The total apparel market in H&M's biggest market Germany
shrank 9 percent in February, according to a survey of retailers
conducted by Textilwirtschaft and published on March 8.
Spain's Inditex is less exposed to northern Europe than H&M
and has a larger share of sales from brands other than its
flagship Zara brand. It also has a larger share of sales in
H&M's shares were down 4.5 percent at 0925 GMT to leave the
stock down 17 percent over the past year.
"I think market conditions are the main driver of the weak
February number," UBS analyst Adam Cochrane said, adding
investors also fear H&M is losing market share.
H&M, which saw sales growth slow and profits fall last year,
is branching out into more brands to reach more customers and
investing to improve its online services in response to tougher
competition in its budget segment and from online-only players.
It said a negative calendar effect of 4 percentage points
weighed on sales in February, which is the final month of the
group's fiscal first quarter.
Fiscal first-quarter sales were 47.0 billion crowns ($5.25
billion), up from a year-ago 43.7 billion but below a 48.1
billion mean forecast in Reuters' poll of analysts.
H&M, which did not comment further on the sales figures, is
due to publish its full fiscal first-quarter report on March 30.
The company in January launched a target for annual
local-currency sales growth of 10-15 percent and said it expects
to be within that range from this year on.
($1 = 8.9528 Swedish crowns)
(Reporting by Anna Ringstrom, additional reporting by Helena
Soderpalm; Editing by Keith Weir)