Global second-largest listed fashion retailer H&M announced on Thursday that the operating profit growth for the second quarter, ending in May of this year, was lower than expected, and June sales are expected to decline, making it more difficult to achieve its annual profit goal.
The company said that operating profit for the second quarter was SEK 7.1 billion (approximately USD 672.5 million), higher than SEK 4.74 billion in the same period last year, but lower than the average analyst expectation of SEK 7.37 billion according to LSEG survey.
H&M said that local currency sales in June this year are expected to be down 6% from the same period last year, partially due to unstable weather in many large markets.
Daniel Erver, CEO of the company, said that the target of achieving an operating profit margin of 10% by the 2024 fiscal year is still expected, but this goal has become more difficult to achieve.
He said: "External factors that affect our procurement costs and sales revenue, including raw materials and forex, will have a greater negative impact than we expected in the second half of the year."
He added: "The most important premise for achieving our goals is to further strengthen sales growth in the second half of the year compared to the second quarter."