Retailers (XRT) Dip as Apparel Giant H&M Sees Sales, Market Share Slip in August (M) (ANN)

September 17, 2012 11:40 AM EDT
Retailers are lower on the session following a warning issued by Sweden-based Hennes & Mauritz (H&M) earlier.

H&M reported that August sales rose 6 percent with comps dropping 4 percent over the same period. Analysts were looking for sales to rise 11 percent on a 1 percent jump in comps.

The surprising weakness comes from lingering warm weather, which H&M said affected sales of autumn clothing.

One analyst from DNB Markets noted that, given overall August sales numbers from the U.S. and European markets, it mean H&M underperformed by about 4 percent.

H&M also got hit on FX translation. The firm generally buys with U.S. dollars, sells in euro, and has to transition back into Swedish crowns. Both the dollar and crown have been stronger versus the euro in recent months.

Investors will be keeping an eye on the retail segment as calendar third-quarter 2012 earning season approaches, particularly those with larger European exposure. Currently, the SPDR S&P Retail (NYSE: XRT) is off about 0.6 percent, with names like Gap, Inc. (NYSE: GPS), ANN (NYSE: ANN), Macy's (NYSE: M), New York & Co. (NYSE: NWY), and others also in negative territory.

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