Fast Fashion H&M March Sales Less Than Expected Share Price Hit A New Low Of 4 Years

H&M Hennes & Mauritz AB (HMb.ST) released sales figures for March this year, though improved compared with February, still worse than the previous group's own expectations and market expectations, dragging down the group's stock price early today, down 1.4% to 215.7 euros, the lowest level since the end of 2012.

In the past year, the sales and profits of the second largest apparel retailers in the world have not been up to many times. In February this year, its sales fell for the first time in 4 years. Although the group explained that the negative effect of the calendar year's calendar year produced 4 percentage points, it led to a 1% decline in sales, but it has fully reflected the group's slump.

When the first quarter earnings report was released in March 30th, H&M Hennes & Mauritz AB said that the 1-28 day sales of global tax included an annual increase of 7% according to the local exchange rate, but today's monthly report shows that the increase in March has narrowed to 6%, up 8% in the same period last year.

In March, the first quarter of the two quarter, the Group recorded only 4% growth in the first quarter. The Group CEO Karl-Johan Persson had warned that the annual sales would be difficult to achieve the 10%-15% growth target.

He also pointed out today that 3, 4 and May should be considered as one, because Easter holidays will fall in different months, and the weather varies greatly during this period.

Soci e t e G e n rale SA SA analyst Anne Critchlow said sales figures for March were another blow to the group, and although Easter was boosted in April, the cold weather in the important Nordic and Western European markets may limit the demand for spring outfits. No fashion Chinese net data showed that the group's stock increased by 30% in the first quarter.

Anne Critchlow believes that the biggest challenge facing the group is that the price competition in the "value fashion" field of H&M brand is the most intense, and it is also the most crowded market in the clothing industry.

GlobalData PLC analyst Maureen Hinton said that when the brand developed very well, it would be very difficult to maintain growth, and new markets and new customers must be found.

In recent years, H&M Hennes & Mauritz AB hopes to offset the slowdown in H&M by introducing more high-end brands. Last month, the group just announced the launch of a new high-end brand ARKET in the fall this year, which is similar to the latest brand new product (born in 2013) Other Stoires and the first high-end brand COS founded 10 years ago, but it is different from any other concept of the group, while the home brand H&M Home will also set up its first independent store in 2018.

The group revealed last month that COS, Other Stories, Monki, Weekday and H&M Home have made excellent progress in the first quarter.

Carnegie analyst Niklas Ekman believes the group's performance once again proves the difficulty of the market, and he is puzzled by the radical expansion of the group under such a background and believes that it should first slow down the pace of expansion.

As of March 31st, the group had 4426 stores worldwide, an increase of 10% over the same period last year, 3997.

Now the group has shifted its focus from offline to online.

In the first half of the fiscal year, H&M brand will introduce e-commerce in Turkey, Taiwan, Hongkong, Macao, Singapore and Malaysia.

H&M Hennes & Mauritz AB (HMb.ST) fell 1.05% to 216.4 Swedish Krona in late trading, which has fallen 27.1% in the past 12 months.

Analysts Anne Critchlow and Niklas Ekman both gave the stock a "sell" rating.