April 15, 2013 / 8:41 AM / 4 years ago

UPDATE 1-Cold weather hits H&M sales in March

* Comparable sales -12 pct vs consensus -11 pct

* Total sales -4 pct vs consensus -2.5 pct

* Yr/yr comparison tough, analysts focus on April

* Shares fall 1 pct (Adds analyst comment, background)

By Anna Ringstrom and Veronica Ek

STOCKHOLM, April 15 (Reuters) - The world's second largest fashion retailer, Hennes & Mauritz, said sales in March fell for a sixth month as a long winter added to consumer gloom in Europe, leaving spring clothing on the racks.

Sales in stores open a year or more fell 12 percent in local currencies from March 2012, when the weather was unusually warm, while total sales were down 4 percent.

H&M, which has the bulk of business in austerity hit Europe, said stubborn chill in Europe and North America delayed the start of the season for the spring collections.

"The unusually cold weather has continued also in April, primarily in Europe," it said in a statement.

The March figures were slightly below expectations. Analysts polled by Reuters had forecast an 11.2 percent drop and a 2.5 percent drop respectively.

"It's true that the weather isn't helping the sector but ... competition is tough, consumer budgets are tight," said Natixis analyst Jean-Baptiste Tessier.

"The market is waiting to see if things normalise in terms of gross margin, like-for-like sales and raw materials. If the picture doesn't change the share can't trade on current multiples."

H&M shares trade at a price-to-earnings ratio of 23 times 2013 earnings, according to Reuters data, well above a sector average of 18 for European retailers but below biggest rival Inditex's 26.

H&M's shares were down 1.1 percent at 0838 GMT.

Shares in Zara owner Inditex have fallen slightly this year after soaring last year, outpacing H&M due to growth in emerging markets and limited exposure to output cost inflation in Asia.

In March 2012 H&M sales soared 26 percent in total and by 16 percent in comparable units.

"The window in which you can sell the spring garments has narrowed, and that could lead to some discounting," Sydbank analyst Soren Hansen said.

"They could maybe sell more in April, but I'm not sure that they will be able to compensate for the loss in March." (Reporting by Stockholm Newsroom; Editing by Louise Heavens)

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