Cold weather hampers H&M April sales

STOCKHOLM - The world's second largest fashion retailer Hennes & Mauritz reported a much smaller than expected rise in underlying April sales as cold weather across its key European markets held back consumer appetite for new spring wear.

The Swedish company has struggled this year with weak consumer demand in Europe, where it makes the lion's share of its revenues. April marked the end to a six-month period of declining same-store sales.

But local currency sales in stores open a year or more rose only 1 percent in April, undershooting the average forecast for a 5.6 percent rise in a Reuters poll. Total sales were up 11 percent, compared with an expected 14.6 percent.

"Sales during the first weeks in April were negatively affected by the unseasonably cold weather mainly in Europe," H&M said in a statement on Wednesday.

April last year was a weak month, making for easier comparisons for H&M. Like-for-like sales fell 10 percent in April 2012, and total sales were down 1 percent.

April is the second month of H&M's fiscal second quarter,

Analysts said prior to the release that sales had been weak so far this quarter, increasing the risk of markdowns. That would hurt profitability at H&M, which has already seen margins fall due to currency swings and investments in new stores.

With less than half of Inditex's 6,000 stores globally, H&M lags its arch rival in sales. H&M shares trade at a price-to-earnings ratio of 23 times 2013 earnings, according to Reuters data, below Inditex's 27.