H&M, the Swedish fashion retailer, has announced that its sales for the latest quarter have fallen short of expectations, a situation it attributes to recent store closures.

In its report, H&M indicated that net sales for the three months ending February 28 increased by 2% to reach 55.3 billion Swedish krona, but the growth rate diminished to 1% in March as consumer financial pressures continued to mount.

The company's sales performance was further impacted by its strategic decision to streamline operations, which included reducing its store count.

During the quarter, H&M closed a net total of 40 stores, with 35 closures attributed to the H&M brand and five to Monki.

Consequently, the retailer's total store count stood at 4,213 at the end of last month, reflecting a decrease of 125 stores over the past year.

H&M also experienced a slight decline in gross profit, reporting £27.2 billion for the quarter, down from £27.7 billion in the previous year.

CEO Daniel Erver noted that the company's profitability was adversely affected by a weaker gross margin, which was driven by external factors, higher markdowns, and increased investment aimed at enhancing customer offerings.

In Erver's remarks, he acknowledged that while the company has implemented operational improvements and maintained effective cost control, sales and earnings for the quarter were weaker than anticipated.

He pointed out that the first quarter is traditionally the smallest in terms of sales and margin, and expressed optimism about future performance, stating that the negative impacts observed would likely be less significant in the second quarter.

Additionally, H&M's efforts to refine its women's clothing assortment have started to yield positive results, influencing trends in consumer purchasing behavior in the recent quarter.