H&M's sales bounce back in September

STOCKHOLM - Like-for-like sales at Hennes & Mauritz returned to growth in September after falling in August, easing fears about the impact of the global slowdown on the world's second-largest fashion retailer.

The Swedish budget apparel firm said on Monday sales at stores open a year or more grew 6 percent in local currencies in September, above the average forecast of 4 percent growth given by analysts in a Reuters poll.

That compared with a 4 percent drop in August which H&M blamed on unusually warm weather in Europe, where it has the bulk of business.

Analysts had expected some autumn wear sales to have gained pace in cooler September. Clothing sales in Germany, H&M's biggest single market, rose 5 percent in September, industry data showed.

"They had a horrible August so it's good to see that they come back in September," DNB Markets analyst Haakon Aschehoug, who has a "hold" rating on H&M's shares,said.

"That makes us more comfortable that there has not been anything structural, in terms of the goods they have in store or whatever. So I think it bodes well for the next few months."

Total sales in September, the first month of the fast-expanding firm's fiscal fourth quarter, were up 15 percent from a year earlier, just above the average forecast and a preliminary figure unveiled in late September of a 14 percent increase.

"They had a very, very favourable week of weather at the end of September," Anne Critchlow, analyst at Societe Generale said.

"We are actually sellers of the stock for structural reasons. We do see the gross margin under pressure. But for those five days of trading, it's good news."

H&M, which trails Zara owner Inditex by value and turnover, as well as by the number of markets and stores, said it had 2,669 stores on Sept. 30 against 2,363 a year earlier.

In the third quarter H&M's earnings missed forecasts as grim economic conditions and a summer heat wave kept shoppers away and a strong Swedish crown hit margins. Inditex, meanwhile, last month posted forecast-beating profits for the February-July period, helped by online and emerging market growth.

(Reporting by Anna Ringstrom, Additional reporting by Simon Johnson and Veronica Ek; Editing by Greg Mahlich)