H&M sales soar but shares slip on wider Ukraine impact concern

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STOCKHOLM, March 15 (Reuters) – H&M (HMb.ST) reported a 23% rise in first quarter gross sales on Tuesday, which was according to market expectations, because the world’s second-biggest vogue retailer makes an attempt to construct on its restoration from the COVID-19 pandemic.

Shares in Sweden’s H&M, which didn’t give any remark in its assertion, had been down 3% in early commerce as analysts centered on the potential impression of the Ukraine disaster on its enterprise in Central and Jap Europe and wider international repurcussions.

Web gross sales in H&M’s fiscal first quarter from December by February, its seasonally slowest, had been up by 18% in native forex phrases, at 49.2 billion crowns ($5.13 billion), in comparison with a mean forecast from analysts polled by Refinitiv of 49.1 billion crowns.

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Credit score Suisse mentioned in a be aware the figures implied a slowdown in local-currency gross sales progress to round 14% in February, from the round 20% flagged beforehand for December-January.

H&M earlier this month briefly closed its shops in Russia, which final quarter accounted for 4% of group gross sales, becoming a member of a rising checklist of worldwide firms shunning the nation over its invasion of Ukraine.

RBC analyst Richard Chamberlain mentioned he had minimize revenue estimates for H&M for this yr and subsequent by round 10%, pointing to the Russia retailer closures but additionally the actual fact Central and Jap Europe account for some 12% of group gross sales.

Lower than a month earlier than Russia invaded Ukraine, H&M had drawn a line underneath the pandemic, and several other powerful years earlier than that, reporting a leap in revenue and saying it was mountaineering investments with the purpose of doubling gross sales by 2030. learn extra

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Credit score Suisse analysts famous that whereas Russia accounts for a small share of H&M’s gross sales, the Ukraine disaster may end in a fabric impact on international disposable revenue and demand.

Russia, which calls its actions in Ukraine a “particular navy operation”, has proposed nationalising belongings of overseas companies that depart within the wake of financial sanctions. learn extra

H&M will publish its full quarterly earnings report on March 31. Its largest rival Inditex , the proprietor of Zara, is because of report quarterly outcomes on March 16.

($1 = 9.5890 Swedish crowns)

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Reporting by Anna Ringstrom; enhancing by Niklas Pollard and Alexander Smith

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