Swedish clothing retailer Hennes & Mauritz (H&M) has reported that its net sales in the third quarter (Q3) of fiscal 2022 (FY22) grew by 3% to Skr57.4bn ($5.17bn), compared with SEK55.58bn ($5.01bn) in the same period of last year (FY21).

The company reported a drop in profit for Q3 as its exit from the Russian market hurt the retailer.

H&M’s net sales in local currencies also declined by 4%.

For the three months to 31 August, the brand’s operating profit, excluding a one-time cost for Russia, was Skr3bn, compared with Skr6.27bn in Q3 2022.

Its operating profit on a reported basis also fell significantly to Skr902m from Skr6.2bn in Q3 2021.

H&M also saw its profit after tax, excluding the one-time cost for Russia, decline to Skr2.15bn from Skr4.69bn a year previous.

H&M CEO Helena Helmersson said: “The third quarter has largely been impacted by our decision to pause sales and then wind down the business in Russia.

“This has had a significant effect on our sales and profitability, which explains half of the decrease in profits compared with the third quarter last year.

“Many other external challenges also made their mark on the quarter. In common with the rest of the industry, sales were weak in many of our major markets at the start of the period.

“Sales then gradually improved, despite of a heatwave in several European countries and some remaining delays in the supply of goods.

“Increased raw materials and freight prices as well as a stronger US dollar resulted in substantial cost increases for purchases of goods.

“Overall, these factors had a substantial negative impact on profit for the quarter.”

For the nine months to 31 August, H&M’s net sales in its native currency grew by 13% to Skr161.12bn.

The company’s profit after tax, excluding the one-time cost for Russia, was Skr5.77bn.