Shares in H&M sank on Thursday after the world鈥檚 second-biggest fashion retailer reported a steep drop in quarterly profits and lowered its earnings outlook for the year.
The Swedish company said its profit after tax reached 2.3 billion kronor ($226 million) in its third quarter, which runs from June to August 鈥� down 30 per cent from the same period last year.
Sales were slow in June due to cold weather in key European markets before picking up later in the summer, chief executive Daniel Erver said in an earnings statement.
鈥楥onsumers鈥� living costs have remained high during the year, and at the same time we continue to see turbulence in the world around us,鈥� Erver said.
鈥楨xternal factors have impacted our sales revenue and purchasing costs more than we expected,鈥� he added.
Erver said the company now expects this year鈥檚 operating margin 鈥� which compares operating profit to sales revenue 鈥� to be lower than 10 per cent.
H&M鈥檚 operating profit reached 3.5 billion kronor in the third quarter, down 26 per cent from the same period last year.
Sales fell three per cent to 59 billion kronor.