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UPDATE 1-H&M October like-for-like sales unexpectedly drop
November 15, 2012 / 7:51 AM / 5 years ago

UPDATE 1-H&M October like-for-like sales unexpectedly drop

* Comparable sales fall 5 pct vs +0.4 pct forecast in Reuters poll

* Total sales +4 pct vs consensus +9 pct

* Analyst cites weather, European consumer gloom (Adds detail, analyst)

STOCKHOLM, Nov 15 (Reuters) - Hennes & Mauritz, the world’s second-largest fashion retailer, reported an unexpected 5 percent fall in comparable sales in October as it suffers from weak demand in crisis-hit Europe.

The fall in October sales in stores open for more than a year in local currencies compared with the average forecast in a Reuters poll for a slight rise of 0.4 percent.

Total sales, which includes new store openings, rose 4 percent, less than the 9 percent forecast in the poll. October is the second month of its fiscal fourth quarter.

“It’s a very weak figure,” said Cheuvreux analyst Daniel Ovin of October sales, which on a like-for-like basis came after a rise of 6 percent in September.

“I think the explanation lies in the fact it’s been an unusually warm autumn. There is also a negative calendar effect, and we know consumers have been weak for some time.”

October total sales were the weakest since April, when they were down 1 percent. In September, total sales grew 15 percent.

H&M has most of its business in Europe, where a sovereign debt crisis and austerity measures have dampened demand.

Apparel sales in Germany, H&M’s single biggest market, were down 4 percent in October, according to industry data.

H&M said it had 2,715 stores at the end of October, up from 2410 at the end of the same month last year. (Reporting by Anna Ringstrom, editing by Patrick Lannin)

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