Hennes & Mauritz AB shares plunged after the fast-fashion retailer reported a slump in sales in June and said meeting a key profitability target had become tougher.

The stock fell as much as 15 per cent in Stockholm trading, the biggest drop since 2017, more than wiping out its gains so far this year. 

Sales in June probably fell about six per cent in local currencies compared to last year, H&M said Thursday, as bad weather in key markets kept shoppers at home. The goal of hitting a 10 per cent operating margin this year has also become more challenging, it said.

The results mark an end to the honeymoon period for Chief Executive Officer Daniel Erver, who took over after Helena Helmersson abruptly stepped down in January and prompted some optimism when he delivered his first set of earnings back in March. 

Like his predecessor, he’s under pressure to accelerate H&M’s turnaround in the face of competition from Zara-owner Inditex SA and upstart online challengers like China’s Shein. 

The CEO change at H&M has so far left Helmersson’s strategy largely intact, including an ambitious target of doubling sales by 2030 from 2021 levels and the operating margin goal. 

While the company said Thursday it’s sticking with that profitability target, the conditions for meeting it have become tougher, according to Erver.

“External factors that influence our purchasing costs and sales revenues, including materials and foreign currency, will have a more negative impact than we expected in the second half of the year,” he said in a statement.

H&M also reported operating profit in the three months through May that fell short of analysts’ expectations.

For years, H&M has been dogged by a buildup of stock that it’s then had to discount to clear, squeezing margins. Inditex, by contrast, has long been a standout in the industry, with its range of designs and fast delivery turnarounds helping it post double-digit sales increases and healthy margins. 

Earlier this month, the Spanish retail group reported strong sales growth in May, the start of its current quarter, even as rivals complained that poor weather had hampered sales.