H&M, the world’s second-biggest fashion retailer, posted a bigger than expected rise in sales in the three months from March, joining its main rival Inditex in reporting a rebound in demand after the pandemic.

Net sales were up 17 percent year-on-year, or 12 percent when measured in local currencies, at 54.5 billion crowns ($5.4 billion) in its fiscal second quarter, the Swedish company said in a statement on Wednesday.

Analysts polled by Refinitiv had on average forecast sales of 52.8 billion crowns.

Turnover was still below H&M’s pre-pandemic second quarter in 2019, however, when it was 57.4 billion crowns.

“Whilst in a less spectacular manner than Inditex last week, H&M also confirms today that the reopening process in Europe has led to strong demand conditions persisting in recent weeks,” analysts at Jefferies, who have a “hold” rating on H&M shares, said in a note to clients.

“Investors will be keen to better understand the extent to which price recovery is offsetting mounting input pressures and rebuilding costs,” they said.

H&M’s biggest rival Inditex, which owns the Zara brand, reported an 80 percent jump in quarterly profit last week as post-pandemic demand soared.

H&M shares had fallen 2.5 percent by 07:30 GMT and are now down more than 25 percent this year.

“Whilst the top line improvement is encouraging, we are mindful that strength in clothing trends over summer could be short-lived as the consumer environment weakens,” JPMorgan analysts said in a note to clients.

“We note that Nordics sports retailer XXL profit warned on Q2 yesterday evening, and that this followed a warning last week from online clothing pure-play Boozt, with both citing weakening consumer sentiment,” they said.

H&M, which is due to publish its full quarterly earnings on June 29, did not comment on the figures.

In March, H&M, which has the bulk of its business in Europe, flagged price rises this year as it posted a quarterly profit below expectations amid high raw material and transportation costs.

By Anna Ringstrom and Marta Frackowiak; Editor: Stine Jacobsen and David Clarke

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Sales rose 6 percent in local currencies in March compared with 23 percent growth in the three months through February, H&M said.