* H&M had guided for around 9 pct growth
* H&M is facing increased competition
(Adds detail, background, analyst, shares)
STOCKHOLM Feb 15 Swedish budget fashion
retailer H&M reported an 8 percent increase in sales in
January, the figure falling slightly short of a preliminary
H&M, the world's second-biggest clothing firm after Zara
owner Inditex, is targeting annual local-currency sales
growth of 10-15 percent and has said it expects to be within
that range from this year on.
H&M had earlier said that growth in the period to Jan. 29
was 11 percent, with the caveat that there would be a negative
calendar effect of around 2 percentage points at the end of the
"It's a little surprising that January sales growth has come
in 1 percentage point below this level," said Societe Generale
analyst Anne Critchlow, adding that such a variance between
H&M's preliminary and final figure was not without precedent.
In December the equivalent sales growth figure was 6
percent, while in January 2016 it was 7 percent.
H&M, which saw sales growth slow and profits fall last year,
is branching out into more brands to reach more customers and
investing heavily to speed up supply and improve its online
range in response to tougher competition in its budget segment
and from online-only players.
H&M's shares were down 0.3 percent at 0835 GMT, lagging the
broader market in Stockholm and the European retail
index, and taking a 12-months drop to 11 percent.
H&M said it had 4,380 stores as of the end of January, up 11
percent from a year ago. The company recently replaced a
long-standing 10-15 percent annual store growth target with the
turnover target to reflect growing e-commerce.
(Reporting by Anna Ringstrom; Editing by Simon Johnson/Keith