High street fashion giant H&M has seen its shares hit a 10-year low after first-quarter profits tumbled following the recent cold snap and moves to slash prices to shift stock.
The Swedish group posted a slump in pre-tax profits to 1.3 billion Swedish krona (€127m) for the three months to February 28th, down from 3.2 billion Swedish krona ((€313m) a year earlier.
It said group sales dropped 2% and were unchanged in local currencies.
H&M said the cold weather had hit demand for spring lines, although it has also been knocked by widespread discounting to sell stock after seeing poor trading in its stores.
This heavy price-cutting will continue into the second quarter, it warned.
H&M- the world's second-biggest clothes group after Zara owner Inditex - warned last month that "mistakes" had held it back amid the switch to online in the retail sector.
In its latest report, chief executive Karl-Johan Persson said it had been a "tough start to the year" as the "rapid transformation of the fashion retail sector continues".
He added: "Weak sales in the fourth quarter, partly caused by imbalances in the assortment for the H&M brand, resulted in the need for substantial clearance sales in the first quarter.
But he stuck by forecasts made in February for "somewhat better results" in 2018, with the group expecting a 25% surge in sales online and from its new brands such as COS and H&M Home.
It has also previously said it believes stores will return to like-for-like sales growth from 2019 onwards.
H&M has seen its shares tumble over the past three years as it has struggled to keep up with the shift towards online shopping and increased competition.
The stock is now worth less than a third of its value at its peak in 2015.
- Press Association