H&M, the world’s second-largest fashion retailer, posted a substantially lower-than-expected June-August pretax profit on Thursday, owing to cost inflation, slower consumer spending, and one-time charges connected to its withdrawal from Russia.
Pretax earnings in the period, the Swedish group’s fiscal third quarter, decreased to 689 million crowns ($60.9 million) from 6.09 billion crowns the previous year. A team of five experts forecasted a profit of 2.98 billion crowns on average. One-time expenditures associated with the winding down of H&M’s Russian business hurt the outcome, accounting for half of the profit loss.
Consumer confidence in Europe is being harmed by deteriorating security, record oil prices, and soaring inflation. The corporation unveiled a cost-cutting campaign, estimating yearly savings of roughly 2 billion crowns.