Swedish Retail Giant Struggles Amidst Weak Sales and Clearance Sales

  • H&M’s pre-tax profits dropped by 61% in Q4
  • CEO Karl-Johan Persson describes start of 2018 as ‘tough’
  • Shares fell by 5% following the announcement
  • Weak sales and clearance sales affected by cold weather
  • Sales unchanged in local currencies for Q1

H&M, the Swedish retail giant, has reported a 61% drop in pre-tax profits for the three-month period ending February 28th, 2018 compared to the previous year. The decline amounted to 1.26 billion Swedish crowns (£108.24 million), slightly missing analysts’ expectations of 1.29 billion. This led to a 5% drop in share prices, bringing them back to their lowest level since 2008. CEO Karl-Johan Persson acknowledged the challenging start to 2018 but remained optimistic about digitalization opportunities. He attributed weak sales in Q4 to assortment imbalances for the H&M brand and substantial clearance sales, which were further impacted by unusually cold weather affecting spring garment sales. In Q1, local currency sales remained unchanged. Persson noted that ongoing initiatives are showing promise but have not yet reached a scale to significantly affect overall results.

Factuality Level: 10
Factuality Justification: The article provides accurate and objective information about H&M’s financial performance, including specific numbers and quotes from the CEO, without any digressions or personal opinions.
Noise Level: 3
Noise Justification: The article provides relevant information about H&M’s financial performance and the reasons behind it, but lacks in-depth analysis or exploration of long-term trends or possibilities.
Financial Relevance: Yes
Financial Markets Impacted: H&M’s stock price
Financial Rating Justification: The article discusses H&M’s drop in pre-tax profits and its impact on the company, as well as the effect on their stock price, making it financially relevant.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the text.

Reported publicly: www.retailsector.co.uk