H&M Sales Lag, Jefferies Predicts Loss

The Swedish company faces intense competition from rivals like Zara owner Inditex, which saw 18% sales growth in 2022, and the rising fast-fashion eCommerce retailer Shein. H&M previously reported a 68% decline in Q4 profits, attributed to its Russia exit and increased costs, with Shein's rise also a contributing factor.

In response, H&M is implementing sustainability initiatives, including a "Pre-Loved" resale shop with thredUP, mirroring Zara's "Pre-Owned" service. Both H&M and Inditex have started charging for online returns, a strategy PYMNTS research indicates could negatively impact customer loyalty, as 96% of consumers review return policies and 54% are unlikely to purchase without free returns.