H&M blames the September sun for the drop in sales

High street fashion chain H&M warned of falling sales as sunny September dampens demand for autumn clothing.

The Swedish group said it expects sales to fall 10 percent this month compared to the same period last year as it contends with “unusually hot weather in several of the company’s European markets.”

But the update drew comparisons with arch-rival Inditex, which owns Zara and which reported a 14 percent increase in sales between August 1 and September 11.

“If your competitor’s sales basically increase by 14 percent in the same weather, I think that says something,” said Vera Diehl, fund manager at Union Investment, which holds shares in H&M and Inditex.

The H&M update came a day after Asos said it was struggling to sell summer clothes due to its bankruptcy in July and August. Despite the grim September update, H&M shares rose 4%, or 6.3p, to 161p in Stockholm as it revealed profits rose from £66m to £345m between June and August.

The company stuck to its goal of increasing operating margins to 10 percent next year and said it was advancing its cost-cutting program.