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STOCKHOLM: Swedish clothing giant H&M said on Thursday its revenue increased in the first quarter but its closure of Russian stores has started to impact growth.

Hundreds of Western companies have halted their operations in Russia following Moscow’s invasion of Ukraine, with a slew of retailers, including H&M rival Zara, shutting down stores.

H&M has closed 185 stores and stopped online sales in Russia.

H&M said its global sales between March 1 and 28 rose by six percent in local currencies compared to the same period last year.

But excluding Russia, Belarus and Ukraine, sales increased by 11 percent, the company added.

In the first quarter, which preceded the closures, H&M said sales rose 23 percent to 49.2 billion Swedish kronor ($5.3 billion, 4.76 billion euros). In local currencies the increase was 18 percent.

Its net profit bounced back into the black in the December-to-February period at 217 million kronor, following a net loss of 1.1 billion for the same quarter a year earlier.

However, the company’s profits still missed estimates by analysts, who were expecting a pre-tax profit of about one billion, compared to the 282 million reported.

Shares in H&M were down over nine percent in the early hours of trading on the Stockholm stock exchange.

Prior to the war in Ukraine, the Covid-19 pandemic had weighed on the company’s performance.

“In addition to the general consequences of the pandemic, such as disruptions and delays in the supply chain, some of our major markets were impacted by a new wave of the pandemic in the first quarter,” CEO Helena Helmersson said.

“Despite this, we saw a recovery of sales in physical stores compared with last year, while online sales continued to perform well,” she added.

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