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H&M Posts Modest Sales Gains in Q4

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H&MstorefrontH&M missed analysts’ projections for November with a sales increase of 9 percent from the previous month. The Swedish fast fashion giant saw stocks fall by 4.6 percent on the announcement.

In the fourth quarter, ending November 30, the company reported a 7 percent sales increase to Skr 61.1 billion ($6.5 billion). Similarly, sales were up 7 percent for the year to Skr 222.8 billion ($24.0 billion).

The company didn’t provide a statement with the results, but in the past, it has blamed weather for its disappointing performance. Whatever the reason, H&M continues to lag behind fast-fashion frontrunner Zara’s parent company, Inditex—which posted 11 percent sales growth for its first three quarters. This has analysts worried about how the company is structured in the face of Zara’s unbeatable speedy supply chain.

“In November, clothing markets across western and northern Europe should have been supportive, benefiting from colder weather year on year,” SocGen analyst Anne Critchlow told Reuters.

“It remains to be seen whether H&M can accelerate sales in the first month of its new fiscal year, December, or whether slow sales trends will lead to increased mark-downs once again in the first quarter, to end February,” she added.

H&M operates 4,351 stores, an increase of 427 doors over 2015.

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