Fashion retailer H&M's profit tumbles more than expected as costs bite

Sweden's H&M reported connected Friday a overmuch larger than expected driblet successful September-November profit, deed by anemic user assurance and soaring costs that it did not afloat walk connected to terms tags.

Operating nett successful the period, the world's second-biggest manner retailer's fiscal 4th quarter, was 821 cardinal crowns ($79.7 million) against 6.26 cardinal a twelvemonth earlier and a mean forecast of 3.67 cardinal successful a Refinitiv canvass of analysts.

H&M, which had already reported that income successful the 4th were flat, said connected Friday that income from Dec. 1-Jan. 25 - the commencement of its fiscal archetypal 4th - were up 5% successful section currencies.

"The little nett successful the 4th fourth erstwhile compared with the aforesaid 4th successful the erstwhile twelvemonth is chiefly explained by the antagonistic outer factors, nonaccomplishment of the operating nett antecedently contributed by Russia and the one-time outgo of the outgo and ratio programme," it said successful a statement.

The deed from quitting Russia, higher earthy material, freight and vigor costs, currency translation effects and the restructuring complaint totalled astir 5 cardinal crowns, Chief Executive Helena Helmersson said.

"Rather than passing connected the afloat outgo to our customers, we chose to fortify our marketplace presumption further," she said.

H&M successful September launched a thrust to chopped costs by 2 cardinal crowns annually, with savings from layoffs and different measures expected to commencement showing from the 2nd fractional of 2023.

The radical flagged successful November it would chopped astir 1,500 jobs and publication a astir 800 cardinal crown restructuring complaint successful the 4th fourth for the programme.

It announced past twelvemonth it was exiting Russia owed to the country's penetration of Ukraine.

H&M projected a dividend for 2022 of 6.50 crowns per share, unchanged from the twelvemonth before, astir matching expectations.

($1 = 10.2969 Swedish crowns)