STOCKHOLM, Sweden — Hennes & Mauritz AB reported its lowest first-quarter profit in 16 years as extreme and rapid weather swings made it even harder for the Swedish fashion retailer to sell a buildup of unsold garments.
Operating profit fell 62 percent to 1.2 billion kronor ($150 million) in the three months through February, the company said in a statement Tuesday. Analysts expected 1.4 billion kronor.
H&M’s already-downbeat forecast for the start of 2018 was exacerbated by unseasonably warm European weather in January followed by February’s cold snap, whipsawing the clothing retail industry. That forced the company to slash prices even more to clear its biggest inventory position in at least two decades.
Stock-in-trade increased 7 percent to 35 billion kronor at the end of the first quarter, amounting to 17.6 percent of sales.
Last month, H&M forecast sales in comparable stores to drop this year and return to growth in fiscal 2019.
By Anna Molin; editors: Christopher Kingdon, Thomas Mulier and John J. Edwards III.