H&M shares slide as discounts to clear stock loom

Hennes & Mauritz (H&M) said second-quarter price cuts to clear inventory may exceed last year’s, sending the shares tumbling to a four-year low.

Chief financial officer Jyrki Tervonen’s comment on a conference call prompted a stock-price reversal after the retailer earlier reported first-quarter earnings that beat estimates and announced the addition of its first new store brand in three years.

H&M’s inventory levels are up 30% year-on-year and profit will be hurt should the retailer have to offer deeper discounts, said Michelle Wilson, an analyst at Berenberg.