STOCKHOLM (Reuters) – Sweden’s H&M reported on Friday a a lot bigger than anticipated drop in September-November revenue, hit by weak shopper confidence and hovering prices that it didn’t absolutely move on to cost tags.

Working revenue within the interval, the world’s second-biggest vogue retailer’s fiscal fourth quarter, was 821 million crowns ($79.7 million) towards 6.26 billion a yr earlier and a imply forecast of three.67 billion in a Refinitiv ballot of analysts.

H&M, which had already reported that gross sales within the quarter had been flat, stated on Friday that gross sales from Dec. 1-Jan. 25 – the beginning of its fiscal first quarter – had been up 5% in native currencies.

“The decrease revenue within the fourth quarter when put next with the identical quarter within the earlier yr is principally defined by the detrimental exterior components, lack of the working revenue beforehand contributed by Russia and the one-time price of the associated fee and effectivity programme,” it stated in an announcement.

The hit from quitting Russia, increased uncooked materials, freight and power prices, forex translation results and the restructuring cost totalled round 5 billion crowns, Chief Government Helena Helmersson stated.

“Somewhat than passing on the complete price to our clients, we selected to strengthen our market place additional,” she stated.

H&M in September launched a drive to chop prices by 2 billion crowns yearly, with financial savings from layoffs and different measures anticipated to start out exhibiting from the second half of 2023.

The group flagged in November it could reduce round 1,500 jobs and guide a roughly 800 million crown restructuring cost within the fourth quarter for the programme.

It introduced final yr it was exiting Russia as a result of nation’s invasion of Ukraine.

H&M proposed a dividend for 2022 of 6.50 crowns per share, unchanged from the yr earlier than, roughly matching expectations.

($1 = 10.2969 Swedish crowns)

GRAPHIC – H&M lags Zara

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