H&M has blamed price cuts and cold weather for a crash in first-quarter profits and warned that more discounting is needed.
Pre-tax profit crashed 61% to Skr1.6bn (£108m) in the quarter to February 28 thanks to heavy discounting, brought about by the poor weather.
Sales slipped 1.7% to Skr46.2bn (£4bn).
The retailer is now facing a backlog of stock, up 7% compared to this time last year, which it will need to clear via more discounting over the next three months.
H&M group chief executive Karl-Johan Persson said: “The high level of clearance sales combined with unusually cold winter weather had a negative impact on the sales of the spring garments.”
“We take a long-term view that [discounting] together with our knowledge and experience enable us to navigate through times such as this … [and will] lead us back to healthy growth in both sales and profitability.”
H&M has run into trouble recently, reporting a poor 2017 and admitting that it has “made some mistakes”.
In the UK, H&M’s third-biggest market after Germany and the US, sales fell 1%.
Despite its troubles, the group is planning to open 220 new stores this year. The majority will be H&M fascia stores, with 45 including H&M home products and another eight standalone H&M home stores.