H&M's Challenging Start: Sales Fall Short Amid Fashion Frenzy

Swedish retailer H&M reported lower than expected first-quarter sales and a dip in profit margins. Sales rose by 1% in March, a modest start to the spring-summer season. CEO Daniel Erver is pushing to revitalize the brand through increased marketing efforts to compete with rivals Zara and Shein.

H&M, the Swedish fast-fashion giant, has announced weaker than anticipated sales for its first quarter, despite a slight 1% sales increase in March. The slower than expected start to the spring and summer season has raised concerns about its financial trajectory.

The company reported 55.3 billion Swedish crowns ($5.52 billion) in sales for the December to February period, falling short of analysts' forecast of 55.9 billion crowns. CEO Daniel Erver expressed that while sales and earnings were softer than projected, the smaller first quarter does not dampen their confidence moving forward.

Profitability took a hit due to increased discounting and marketing investments, with the operating profit margin dropping to 2.2% from 3.9% a year earlier. Erver, at the helm for just over a year, aims to rejuvenate the brand with ramped-up marketing initiatives, including partnerships with pop stars like Charli XCX, as H&M seeks to compete more effectively with rivals Zara and Shein.

(With inputs from agencies.)