H&M Hennes & Mautritz AB (HNNMY) said Monday it will scrap its current system of monthly sales updates in favor of quarterly reports in order to bring it in line with other retailers in the fashion industry.
The world's second-biggest fashion retailer said June sales rose 7% on a local currency basis compared to the same month last year and grew 10% when converted into Swedish krona.
H&M said the decision was taken in consultation with large institutional shareholders, to publish the group's sales development per quarter rather than monthly.
"The reasoning is that a month is far too short a period over which to assess how sales are developing; in fact, a single month's sales can actually be misleading, since calendar and weather effects - among other things - may significantly affect the outcome," CEO Karl-Johan Persson said in a statement. "Instead sales development should be viewed over a longer period of time, such as over a season or a quarter."
H&M shares gained 1% in the opening hour of trading in Stockholm to change hands at Skr213 each, trimming their loss of the past three months to around 2.2%.
The group will now typically report sales on the 15th of month in which the interim report is due, with third quarter sales expected on Sept. 15.
The company has seen sales growth languish amid tougher competition, including double-digit sales growth from Zara-owner Inditex (IDEXY) and Liberum analysts still hold a cautious view on the retailer and Monday reiterated their 'sell' rating for the stock.
"Global fashion remains highly competitive, with established, well-invested multi-channel players (e.g. Inditex), as well as younger, high growth pure online players (e.g. ASOS, boohoo.com) all sparring for market share," Liberum analysts including Adam Tomlinson said in a Tuesday note. "We fear H&M lacks pricing power and the brand continues to resonate less strongly with consumers than it has previously. This is reflected in continued negative implied LFL growth in its core geographies."