Shares of H&M tumbled 7% on Thursday after the world’s second-largest listed fashion retailer posted a miss on operating profit and abandoned its earnings margin target.
The Swedish clothing retailer reported that operating profit for the group’s fiscal third quarter came in at 3.51 billion Swedish crowns ($345.8 million), which compared to 4.74 billion Swedish crowns a year ago. Analysts surveyed by LSEG had forecast operating profit of 4.93 billion, Reuters reported.
H&M said it had dropped its earnings margin target for 2024 after warning of more challenging conditions earlier in the year.
“External factors have impacted our sales revenue and purchasing costs more than we expected. At present we estimate that this year’s operating margin will be lower than 10 percent,” Daniel Ervér, chief executive officer of H&M, said in a written statement.
“We are confident that our plan will contribute to increased sales and profitability,” he added.
Shares of H&M fell sharply on the news. The Stockholm-listed firm was among the worst-performing stocks on the pan-European Stoxx 600 during morning trading.
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