H&M is expected to see EBITDA fall 10% year-on-year when it reports results this week, according to at least one financial analyst.
Espirito Santo forecasts EBITDA will have declined more than expected in the second quarter of 2013 due to “a significant drop in sales densities” as a result of the weather and economy, as well as a 70bps drop in margins because of higher mark downs. The analyst also notes it is up against tough comparisons from 2012.
Analyst Filipe Rosa said: “Our EBIT forecast is 5% below consensus, but we believe most of the gap is driven by the lower sales, which have already been reported, but that consensus has not adjusted yet.”
Last week, H&M reported another set of muted figures leading several analysts to warn that it was losing out to competitors such as Asos and Primark, which had expanded beyond the UK borders to compete internationally with the likes of H&M and Inditex.