2nd UPDATE: H&M Same-Store Sales Continue Falling In Sep
October 15 2009 - 6:49AM
Dow Jones News
Fashion retailer Hennes & Mauritz AB (HM-B.SK) Thursday
missed forecasts by posting a 8% drop in September comparable
sales, blaming the fall on unseasonably warm weather in most of its
markets and continued slowdown in consumer spending.
H&M, the world's third-largest clothing retailer by revenue
behind U.S.-based Gap Inc. (GPS) and Spain's Inditex SA (ITX.MC),
said same-store sales fell 8% in September from a year earlier,
missing analysts' forecasts for a 7% sales drop in stores open more
than one year.
Total sales, including stores which have opened over the last
year, rose 1%, missing expectations for a 4.3% increase. Gap last
week reported a 1% drop in comparable store sales in September
while Inditex last month said store sales between Aug. 1 and Sept.
14, the most recent figures available, rose 9% in local
currencies.
Including the September figures, the Stockholm-based retailer's
comparable sales have declined in 13 of the 14 past months with
April 2009 being the only exception.
In September last year, H&M's comparable sales declined 2%,
but its total sales increased 10% from a year earlier.
The company had 1,869 stores at the end of September 2009, up
13% from 1,659 stores a year earlier.
H&M is generally seen as outperforming many of its peers
during the downturn due to its winning cheap-and-chic clothing
business concept. The company has repeatedly said that it is
winning market share and that the downturn has made it easier for
it to secure attractive store locations.
Bank Of America-Merrill Lynch analyst Richard Chamberlain, who
has a buy rating on the stock, said in a note that despite missing
forecasts, H&M's sales weren't a disaster and he expects a
better sales performance in October and November.
"October sales should improve as temperatures have dropped and
in November sales should be boosted by the Jimmy Choo collection,
which comes into stores from Nov 14," Chamberlain wrote.
Analyst Anders Wiklund at Evli Bank, who has an accumulate
rating for H&M, said the weak sales had been expected by the
market due to the warm weather.
At 1016 GMT, H&M shares were trading up SEK1.5, or 0.4%, at
SEK409.50 in a lower Nordic market. The stock has risen 45% over
the 12 months
Company Web site: http://www.hm.com
-By Gustav Sandstrom, Dow Jones Newswires; +46-8-5451-3099;
gustav.sandstrom@dowjones.com
(Ian Edmondson contributed to this article.)