A famous brand named H&M has revealed that following the drop in quarterly earnings projections, it might fail to reach its full-year profit margin target. The company’s shares dropped by about 14% due to their expectations that June sales would decline.
Despite the challenging weather conditions, H&M has shown resilience in the face of a 6% drop in sales this month compared to the previous year. The company’s ability to weather such short-term trade impacts in numerous markets, especially in Europe, is a testament to its strength.
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CEO Daniel Erver’s statement reflects H&M‘s proactive approach to addressing challenges. Despite the adverse effects of external factors such as foreign currency fluctuations and material costs, the company is committed to achieving a 10% operation margin by 2024, albeit with more effort.
To meet its target profit margin, H&M aims to boost sales growth in the second half of the year. The firm gave lower product discounts in June, which had a negative short-term effect on sales but a beneficial long-term impact. To boost sales, H&M will provide larger discounts going forward.
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The DNB Markets analysts foresee lowering their full-year projections for H&M’s earnings per share by 1% to 2% following the company’s announcement.
