After a 12-week high, European stocks dropped today thanks to decline of Zurich Insurance Group AG, Hennes & Mauritz AB, Oriflame Cosmetics SA. The two companies notched disappointing results. First disappointment came when Zurich Insurance lost 2.9% percent. Analysts had expected better performance from the insurance company after the second-quarter profit was not as expected.
Hennes & Mauritz AB Declines the Most in 6 Weeks
Hennes & Mauritz AB has been not doing well for the last six weeks and declined the most in six weeks. This clothing retailer reported worse-than-expected sales which also seemed to have impact on the declining stock prices. H & M Hennes & Mauritz AB, a Swedish multinational retail-clothing company, operates in 43 countries, was expected to do well.
Earlier in the month of July, the company had though received higher sales and recorded an increase by 9% compared to the same month the previous year, the comparable units decreased by 1%. The company also estimated and expected that it may get higher sales in August and increase in total revenue in SEK for the third quarter ending August 31.
Oriflame Cosmetics SA, Still Falling Behind
Another company that fell further is Oriflame Cosmetics SA which declined 4.6% after posting quarterly earnings and revenue. Sliding 6.1% to 203.40 kronor Oriflame Cosmetics SA reported earnings before interest, taxes, depreciation and amortization of 42.2 million euros ($56 million). The company’s sales reached to 360 million euros in the second quarter.
Stock analysts had earlier estimated that the company selling personal care, accessories and nutritional products, etc. will be doing well; however, they all got disappointed after it posted its quarterly earnings. Analysts on average had forecast Ebitda (Earnings Before Interest, Taxes, Depreciation and Amortization) of 46.7 million euros and revenue of 367 million Euros for the period.
Complex Case of Zurich Insurance
Zurich Insurance also received significant losses as its value declined 3.3 percent to 243.80 Swiss francs. The insurance company posted second-quarter net income of $789 million but it did not seem enough for investors as it missed the $823.8 million average projection. The company claims that it was the floods in central Europe in May and June which cost it $140 million.
European Shares Snapping Has Global Impact
Amidst the news that dollar weakened further, stocks fell around the world; thus, the declines were not limited to European stocks. At 8:48 a.m. in London, the Stoxx Europe 600 Index slipped 0.6% to 306.87.
To contact the reporter of this story: Jonathan Millet at email@example.com