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H&M third-quarter earnings miss estimates

Sep 30 2016 08:52
Anna Molin

Stockholm - Hennes & Mauritz (H&M) reported third-quarter earnings short of analysts’ expectations as the Swedish fashion retailer marked down prices and the strong dollar raised garment costs.

Pretext profit fell to 6.3bn kronor ($730m) in the three months through August from 6.94bn kronor a year earlier, the Stockholm-based company said in a statement on Friday. That compared with an average 6.37bn-krona estimate of 14 analysts surveyed by Bloomberg.

The gross margin narrowed to 54%, compared with the average analyst estimate of 54.3%.

Warmer-than-usual weather early this autumn has weighed on European retailers as consumers delay purchases of warmer outfits.

H&M said in June it expected that the negative dollar effect would raise purchasing costs in the third quarter.

Earlier this month, H&M said its sales in local currency and including value-added tax increased 7% in August, missing the average analyst estimate of 12%.

The company then also reported third-quarter sales excluding value-added tax of 49bn kronor, missing the average 49.6bn-krona estimate.

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