H&M, the world's second-largest listed fashion retailer, said on Thursday it no longer expected to reach its full-year earnings margin goal, while reporting a lower-than-expected operating profit for the June-August period.
H&M has struggled to boost its profitability amid high inflation and stiff competition from its bigger Spanish rival Zara, owned by Inditex, and the rapid growth of cut-price online fast-fashion retailer Shein.
"At present we estimate that this year's operating margin will be lower than 10%," Chief Executive Daniel Erver said in a statement.
The accumulated margin stood 7.4% for the first three quarters.
The full-year operating margins for 2022 and 2023 were 3.2% and 6.2% respectively, and H&M had cautioned in June that factors such as materials costs and foreign currency had made the 2024 target more difficult to reach.
