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H&M posts unexpectedly strong December sales despite warm weather

H&M posts better than expected December sales growth today despite unusually warm weather
H&M posts better than expected December sales growth today despite unusually warm weather

The world's second-biggest fashion retailer, Hennes & Mauritz, reported better than expected December sales growth today despite unusually warm weather in Europe and North America that hurt rivals. 

Local currency total turnover in December, including the crucial Christmas period, rose 10% from a year earlier. 

This compared to a forecast 8% in a Reuters poll of analysts. 

The pace in December, the first month of H&M's fiscal 2015/2016 year, was more than twice as high as in November, although compared with a year earlier, growth slowed. 

The sales figure includes newly-opened stores and is not a like-for-like comparison. 

As in 2014, an unusually warm autumn has dented many fashion chains' sales of winter garments, and temperatures stayed unexpectedly high in many of H&M's key markets in December as well. 

Analysts cautioned the sales growth risked being boosted by large markdowns, which would further dent gross margins already under pressure from large investments and purchase costs.

H&M, which does the bulk of its business in Europe, did not comment on its December figure. 

Whether sales were helped by markdowns, the opening of a large number of new stores in November or well-received new collections will likely remain unclear until its first-quarter report. 

In Germany, H&M's single-biggest market, the clothing sector was down 1% in December, according to industry data. 

Rivals that have reported weak pre-Christmas sales include GAP, Next and Marks and Spencer. 

Biggest rival Inditex, with Zara its largest brand, has reported a relatively strong 15% increase in local currency sales from November 1 to December 3 but has yet to open the books on the Christmas season. 

H&M's full-year 2014/2015 report, due on January 28, will show whether markdowns have hit fourth-quarter results following slower than expected sales in the period.