Shares of fashion giant H&M drop as fourth-quarter sales miss estimates
Shares of H&M dropped more than 5% on Thursday after the world's second-largest retailer missed sales forecasts in the fourth quarter.
Sales at the Swedish fashion giant came in at 62.19 billion Swedish krona in the final three months of the year, below the 63.48 billion forecast in a Reuters poll, but up 3% in local currencies.
The company attributed the sales shortfall in part to the later occurrence of Black Friday, but said that sales ticked up in December and January, in a positive start to the new fiscal year.
Overall in 2024, sales rose 1% in local currencies to come in at 234.58 billion Swedish krona, driven primarily by the group's womenswear, sportswear and online segments.
Full-year operating profit came in slightly better than expected, however. H&M posted operating profit of 17.3 billion Swedish krona ($1.57 billion) for 2024, versus the 17.2 billion Swedish krona forecast by analysts in an LSEG poll.
Fourth-quarter operating profit came in at 4.6 billion Swedish krona versus the 4.2 billion Swedish krona analysts had predicted.
Shares pared losses slightly to trade down 3.25% by 9:18 a.m. London time.
"Sales and operating profit increased in the fourth quarter driven by strong online sales, well-received women's fashion collections and effective cost control. By focusing on our core business and delivering on our plan, we are on track towards long-term, profitable growth," CEO Daniel Ervér said in a statement accompanying the results.
Looking ahead, Ervér said he expected pressure on consumers to alleviate further in 2025, and added that the company was well placed to deal with any "negative external" impacts in international trade.
"While continued challenging macroeconomic conditions and geopolitical uncertainty