H&M scrapped its margin target for 2024 as higher discounting, costs and fierce competition hurt operating profit in the third quarter, denting shares in the world's second-biggest listed fashion retailer.

H&M won’t hit a key profitability target this year but said sales momentum picked up through July and August before accelerating further in September.

Shares of H&M tumbled 7% on Thursday after the world's second-largest listed fashion retailer posted a miss on operating profit.

H&M has struggled for more than a decade with weak profitability after being outpaced by Spain’s Inditex, the world’s largest fashion retailer and owner of the Zara brand. In recent years the Swedish company has come under intense pressure from lower-cost rivals such as Shein and Temu.

Hennes & Mauritz ( OTCPK:HNNMY) expects a lower margin target for 2024 due to a combination of factors that have adversely affected its profitability. The company reported lower-than-expected operating profits for the June-August period, primarily driven by increased markdowns, rising costs, and intense competition within the retail sector.

Swedish retailer H&M scrapped on Thursday its margin target for 2024 as higher discounting, costs and fierce competition in the market hurt its

H&M has struggled for more than a decade with weak profitability after being outpaced by Spain’s Inditex, the world’s largest fashion retailer and owner of the Zara brand. In recent years the Swedish company has come under intense pressure from lower-cost rivals such as Shein and Temu.

Shares of Swedish clothing retailer H&M plunged nearly 8% Thursday after the company reported a miss on operating profit for its fiscal third quarter and dropped its 2024 earnings margin target. CEO Daniel Ervér,