H&M reports lower than expected sales as it struggles to compete with rival Zara

// H&M sales slip more than expected over summer as the fashion retailer fell further behind rival Zara

// The Swedish retailer said demand improved in the final part of the quarter

H&M has posted lower-than-expected quarterly sales as it struggles to compete with rival Zara and consumers tighten their belts amid soaring energy and food bills.

The world’s second-biggest fashion retailer said third-quarter net sales were up 3% from a year earlier at £4.65 billion, lower than previous estimates by Refinitiv who had predicted a 5% rise for the June-August quarter.

Measured in local currencies, sales were down 4%.

“The third quarter got off to a weak start, in common with the industry in many of the group’s major markets,” H&M, which does the bulk of its business in Europe, said in a statement.

“Sales improved sequentially during the quarter, with a better start for the autumn collections than last year,” it added.

The performance substantially underperformed market leader Zara owner Inditex, which saw first-half sales and profits hit historic highs, both surging 24.5%.

Although the Spanish fashion giant’s growth pace slowed to 11% in the August 1 to September 11 period.

H&M, which launched its first furniture range for kids last month is set to publish its full third-quarter earnings report on September 29.

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