STOCKHOLM, SWEDEN - Swedish fashion giant Hennes & Mauritz (H&M) yesterday reported a 2-per-cent year-on-year fall in sales at established stores last month, as the growing crisis in the financial sector weighed on consumer spending.
The average forecast of 10 analysts was a 2.5-per-cent fall, said a Reuters survey.
H&M, Europe's second-largest clothes retailer, gives only round numbers for sales and does not give currency figures.
Total sales for the month were up 10 per cent, against a forecast of a 9.1-per-cent gain.
'It was a positive surprise,' analyst Christian Nagstrup at Jyske Bank said.
'In the third-quarter report, they said that sales up to Sept 28 had gone up 9 per cent. So the last few days nudged the figure a bit in the right direction.'
Bloomberg News said that consumers are turning to the moderately-priced garments offered by the Swedish retailer as higher fuel and grocery costs drain incomes.
According to Bloomberg, H&M sells trousers for US$28 (S$41) and children's T-shirts for US$13.
The retail environment has deteriorated in recent months as a global financial crisis deepens.
While H&M and Spain-based rival Inditex, which distributes brands such as Zara and Pull and Bear, have weathered the economic turmoil better than some due to their price-conscious focus on fashion, they are also feeling the squeeze.
In its report for the first half of the year, Inditex said it saw no significant risks or uncertainties in the second half.
It also stuck with a forecast for 4-per-cent like-for-like sales growth.
Analysts, however, said this would be tough to achieve with just a 1-per-cent rise in same-store sales in the first half.
H&M's third-quarter pretax profit undershot expectations as the company was forced to make bigger discounts than the previous year.
It also pointed to higher transport costs and higher prices in the countries where its clothing is produced.
