H&M annual sales growth lags rival Inditex

Thursday, 20 December 2012 00:14 - - {{hitsCtrl.values.hits}}

Reuters: Revenue at world number two fashion retailer Hennes & Mauritz rose 10% this year, lagging forecast growth at larger rival Inditex which is less exposed to the downturn in Europe.

Sweden’s H&M has the bulk of its business in the region, where a sovereign debt crisis and government austerity measures have dampened demand.

Inditex, which owns Zara and other chains, has a larger share of sales than H&M in faster-growing emerging markets and is less exposed to cost inflation in Asia.

H&M posted a smaller-than-expected drop in sales at stores open a year or more in November, the end of its financial year.

Fourth-quarter figures published at the same time would take revenue for the whole year to 120.8 billion Swedish crowns ($18 billion), according to Reuters calculations, a 10% rise on 2011.

That’s less than the 16% rise Inditex is expected to report in its current financial year to the end of January, according to Thomson Reuters Starmine data.

Starmine forecasts put Inditex’s total revenue at 16 billion euros ($21 billion).

H&M said local currency sales at stores open a year or more shrank 1% in November, less than a Reuters poll forecast for a 3% drop and were up 1% in the year as a whole.

The sales drop was the second one in a row after a 5% dip in October.

Total sales in November including new stores were up 7% from a year earlier in local currencies, just above forecast, for a total year rise of 11%.