September sales seen down 10 in local currencies
Q3 operating profit 4.74 bln SEK vs forecast 4.72 bln
Shares up as operating margin improves

STOCKHOLM, Sept 27 Reuters HM said unusually hot weather in many of its European markets had delayed the start of the autumn shopping season, sending sales lower in September, while cost cuts helped the fashion retailer39;s quarterly profit rise.

HM, whose biggest rival is Zara owner Inditex, said September sales would be down 10 yearonyear measured in local currencies. That compares with Inditex reporting sales between Aug. 1 and Sept. 11 that were up 14.

The decline deals a blow to hopes the world39;s secondbiggest fashion retailer is turning its performance around after lagging behind Inditex, as a costofliving crisis curbs shoppers39; spending.

If the sales at your competitor basically go up by 14 with the same weather, that tells you something, to my mind, said Vera Diehl, portfolio manager at Union Investment, which holds shares in both HM and Inditex.

HM39;s shares rose 5 in early trade, however, as profits in the JuneAugust quarter jumped and HM stuck to a goal of increasing its operating margin to 10 next year and said its costcutting programme was continuing at full speed.

In 2022, the margin was 3. In the third quarter, the margin reached 8 from a yearearlier 2.

The target is challenging but achievable, Barclays analyst Nicolas Champ said, adding that it would, however, require some acceleration in topline…