Swedish fashion giant Hennes & Mauritz reported June sales above market expectations, but turnover in established stores fell as economic gloom hit the sector.
Consumer confidence in Europe, the Nordic region and in the United States has slumped in recent months on soaring food and fuel prices, and retailers have begun to feel the pinch.
H&M has seven outlets in Ireland including four in Dublin.
Overall June sales for H&M, the world's third-biggest clothing retailer by sales, were up 8 per cent against market forecasts of a 5.2 per cent gain.
Turnover in stores open a year or more was down 2 per cent from a year earlier, the company said today, compared with forecasts for a 5.6 per cent drop.
H&M said calendar effects had reduced June sales by about 4 percentage points compared with the same month a year ago.
Shares in H&M rose around 2.4 per cent immediately after the figures were published but slipped back to stand up 1.6 per cent at 9.32am. The blue-chip Stockholm index was down 1.5 per cent.
The market had been braced for poor figures from H&M after industry data showed sharp declines in clothing sales in June in two of its biggest markets.
Germany, H&M's biggest market, saw a drop of 11 per cent in clothing sales in June, according to industry journal Textilwirtschaft. In Sweden, H&M's third-largest market, the HUI/Stil index for clothing sales was down 12.2 per cent.
Economic sentiment in the euro zone fell in June to its lowest level since May 2005, while in Sweden, consumer confidence hit a 12-year low. Denmark is technically in a recession and in Norway, consumer confidence is at its lowest level since the third quarter of 2003.
Reuters