H&M, the world's second-largest fashion retailer, dropped over 4% on Friday after reporting flat sales for its most recent quarter, falling short of analyst expectations.
Local currency sales for June to August showed no significant growth year-on-year, disappointing analysts who had predicted a 5% increase, according to research from Reuters.
By 8:00 am, the stock looked like it was heading for its worst day in six months.
Striving to improve profits, with a goal of achieving a 10% operating margin by 2024, the group said it was “going in the right direction”.
Facing stiff competition from various areas such as the well-marketed Zara-owner Inditex, which has been stealing market share, H&M is also facing attacks from fast-fashion brands like Shein and Primark, which are outpacing the Swedish retailer on pricing.
Sales rose 6% to 60.9 billion Swedish krona (SEK) (approximately US$5.45 billion), a third-quarter update revealed, falling short of the SEK63.5 billion expected by analysts.
Earlier this week in London, the retailer confirmed it had opened a ‘pre-loved’ section at its flagship store in Regent Street, with the group keenly focused on making its operations and offerings less environmentally damaging.
Shares in H&M are up over 48% in the current year and trading at around SEK164.