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.

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.

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, the world's second-largest listed fashion retailer, said on Thursday it no longer expected to reach its full-year earnings margin goal, while reporting a lower-than-expected operating profit for the June-August period.

H&M has all but abandoned its profit target for the year as the Swedish fast-fashion chain struggles to boost margins amid higher material and marketing costs and intense competition from rivals such as Shein and Zara.

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,