UPDATE 2-H&M Q3 undershoots, fourth quarter sales start well

(Adds analyst comment, share price)

By Simon Johnson and Rebecka Kihlstrom

STOCKHOLM, Sept 26 (Reuters) - Swedish fashion giant Hennes & Mauritz (HMb.ST: Quote, Profile, Research, Stock Buzz) posted below-consensus third-quarter pretax profit on Wednesday due to weaker revenues than expected, but said sales so far in the fourth quarter had developed well.

H&M, which is marking its 60th year in business, reported a 17 percent rise in pretax profit to 4.4 billion crowns ($674 million) in the third quarter against analysts' average forecast of 4.6 billion in a Reuters poll.

The firm earned 3.8 billion in the same period the previous year.

Revenues came in below expectations at 18.7 billion crowns against an expected 19.1 billion, in part due to weak August sales.

Overall sales were up 11 percent in the month, while like-for-like sales -- measuring stores open at least a year -- fell 1 percent. Analysts had seen monthly sales up 11.9 percent on average with like-for-like sales flat.

The firm's gross margin -- a key measure of cost control -- was 61.2 percent against analysts' expectations of 60.6 percent and 59.2 percent in the third quarter last year.

The company said in a statement this was due to "a more efficient buying process, a favourable U.S. dollar exchange rate and a lower proportion of price reductions".