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STOCKHOLM, Sweden — Hennes & Mauritz AB reported third-quarter earnings short of analysts' expectations as the Swedish fashion retailer marked down prices and the strong dollar raised garment costs.
Pretax profit fell to 6.3 billion kronor ($730 million) in the three months through August from 6.94 billion kronor a year earlier, the Stockholm-based company said in a statement Friday. That compared with an average 6.37 billion-krona estimate of 14 analysts surveyed by Bloomberg. The gross margin narrowed to 54 percent, compared with the average analyst estimate of 54.3 percent.
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 percent in August, missing the average analyst estimate of 12 percent. The company then also reported third-quarter sales excluding value-added tax of 49 billion kronor, missing the average 49.6 billion-krona estimate.
By Anna Molin; editors: Christopher Kingdon and Thomas Mulier.
