Swedish fashion chain Hennes & Mauritz said on Monday its sales rose 14 percent in November year-on-year, lower than expected by analysts, but aided by a collection from Italian designer Roberto Cavalli.
A poll of 10 analysts by Reuters had forecast a rise of 14.9 percent according to the average figure with a median of 15 percent. Like-for-like sales were seen up 2.8 percent.
Retail sales in Europe have been hit in recent months due to uncertainty by an ongoing credit crunch and the long-term effects of the subprime mortgage problems in the United States.
Growth prospects are looking gloomier and shoppers are more hesitant. Retail sales fell 0.7 percent in October, the latest month for which figures are available, rising 0.2 percent year-on-year.
Anders Wiklund, analyst at Evli said H&M's figures were no cause for alarm.
"It was a little shy of expectations. If you look at the market figures from Sweden and Germany, they were negative in November. So a like-for-like figure of plus one is a bit of a Cavalli-effect, certainly."
Germany is H&M's biggest single market and figures from industry body Textilwirtschaft show clothing sales dipped 4 percent in the month. Figures from the Swedish Retail Institute showed clothing sales up 0.5 percent.
Rival Inditex, owner of the Zara and Massimo Dutti chains, has also felt the effect of slower consumer demand, disappointed analysts earlier this month by reporting sales in the year to end-October lower than expected.
Shares in H&M slipped 2.2 percent against a fall of 2.5 percent in Stockholm's blue chip index.
H&M, which does not give sales in currency figures and does not make any comment, has seen its shares rise around 9 percent this year, just underperforming Inditex.
While its main markets were weak, H&M got a small boost from the collection by Cavalli, one in a long line of catwalk designers, including Karl Lagerfeld, Stella McCartney and Viktor & Rolf, to produce one-off collections for H&M.
Cavalli's line went on sale on Nov. 8 with eager shoppers queuing up at stores for clothes by the "king of animal prints".
"I think the Cavalli effect was quite modest," said a second analyst. He said that the Cavalli collection was only available in 200 stores compared to 800 for Lagerfeld.
"(But) you shouldn't underestimate the media effect," he added. "It is an event that strengthens the brand."
Cavalli also designed the costumes for the current come-back tour by British and The Spice Girls.
Sales over H&M's full financial year, which runs from December to November, ere up 17 percent with like-for-like sales up 5 percent.
In 2006, full-year sales rose 11 percent with same-store sales 2 percent higher.
The retailer had 1,522 stores open at the end of November against 1,345 a year earlier.