Fashion retailer H&M hit by rising factory costs

H&M recorded lower than expected quarterly results as the fashion chain faces rising manufacturing costs.

The Swedish retailer increased sales in its first quarter to Feb 28 to Sk54.9bn (£4.3bn), up 12pc from a year earlier. Excluding Belarus, Russia and Ukraine, net sales rose by 16pc. However, analysts at Jefferies said local-currency sales, the figures most watched by markets, were significantly lower than estimates.

H&M’S profits also dropped as attempts to attract price-sensitive customers meant it was unable to pass on rising costs of raw materials, freight and energy.

In January, the world’s second biggest fashion retailer announced plans to close stores across the UK.