March 27, 2018 / 6:21 AM / a month ago

H&M Q1 pretax dives in line with expectations, flags more markdowns

STOCKHOLM, March 27 (Reuters) - Swedish fashion retailer H&M reported on Tuesday a fall in quarterly pretax profit that roughly matched expectations and said higher inventories would lead to increased markdowns also in the second quarter.

Pretax profit in December through February, H&M’s fiscal first quarter, shrank 61 percent to 1.26 billion crowns ($154.0 million) from a year-ago 3.21 billion, against a mean forecast in a Reuters poll of analysts for 1.29 billion.

H&M in February warned markdowns due to weak demand in many of its main H&M brand’s stores would hit earnings, and earlier this month said sales shrank for a second straight quarter, by 2 percent, sending shares down. ($1 = 8.1805 Swedish crowns) (Reporting by Anna Ringstrom and Helena Soderpalm)

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