Fashion group H&M said today that large markdowns capped its third-quarter turnover at 5% but noted that autumn sales had started well.
The world's second largest clothing retailer after Zara owner Inditex reported net sales of 51.2 billion crowns ($6.4 billion). Analysts in a Reuters poll had forecast sales of 51.6 billion.
Local-currency growth was 4%, just below forecasts.
"Sales in the quarter were affected by a significantly larger summer sale this year than in the corresponding quarter last year - both in terms of the number of items and the average discount per piece - which had a dampening effect on revenue growth," the company said.
On a positive note, it said the aggressive summer markdowns had led to an improved inventory position ahead of the fourth quarter and that autumn sales had gotten off to a good start.
The Swedish retailer has launched several independent and mostly higher-end brands in recent years to broaden its customer base in the face of growing competition in its core budget segment.
But the H&M chain still accounts for the bulk of its sales.
H&M is also pushing to improve against pure-online players, such as Asos and Zalando, in a market that is transforming even faster than H&M had expected.
Analysts said tha structural challenges, namely the rapid shift online in young fashion, are weighing on like-for-like sales and H&M's operating margin.
H&M will publish its full June-August report on September 28.
