H&M, the world's second-biggest fashion retailer, posted a forecast-beating 17% jump in March to May sales, joining main rival Inditex in reporting a rebound in demand as pandemic restrictions have eased.
Sales were, however, still lower than before the pandemic began. Investors also voiced concerns over profit margins ahead of H&M's full quarterly earnings report due on June 29.
H&M in March flagged price hikes to compensate for higher raw material and transport costs.
Meanwhile, souring consumer confidence in Europe and stores that were closed in Russia due to the war in Ukraine could prompt price markdowns to help shift unsold clothes.
H&M did not comment on the sales figures today, and its shares were down 6% in morning trade, taking a year-to-date drop to 29%.
"Whilst in a less spectacular manner than Inditex last week, H&M also confirms today that the reopening process in Europe has led to strong demand conditions persisting in recent weeks," Jefferies analysts said in a note to clients.
"Investors will be keen to better understand the extent to which price recovery is offsetting mounting input pressures and rebuilding costs," they added however.
Sales were up 12% year-on-year when measured in local currencies, at 54.5 billion crowns ($5.4 billion) in its fiscal second quarter, the Swedish company said in a statement.
Analysts polled by Refinitiv had on average predicted sales of 52.8 billion crowns.
"Whilst the top line improvement is encouraging, we are mindful that strength in clothing trends over summer could be short-lived as the consumer environment weakens," JPMorgan analysts said in a note.
Inditex, the owner of Zara, reported an 80% jump in quarterly profit last week.
