By Stine Jacobsen

COPENHAGEN (Reuters) -Shares in H&M, the world’s second-biggest fashion retailer, fell 4.5% in early Thursday trade as a 10% rise in net sales in the September-November quarter failed to match a recent pick up in some analysts’ expectations.

H&M, which has struggled to keep up with bigger rival Zara, last month became the first big European retailer to lay off staff in response to the cost-of-living crisis as it tries to save 2 billion Swedish crowns ($196 million) a year.

Net sales for September-November, H&M’s fiscal fourth quarter, reached 62.5 billion crowns ($6.1 billion), up from 56.8 billion crowns a year ago. Analysts polled by Refinitiv had on average forecast 62.17 billion crowns.

“This is a slightly disappointing update in the context of expectations which had drifted higher in recent weeks amid somewhat better market data from Germany and Sweden,” said J.P. Morgan analysts in a research note.

Profits won’t be revealed until full results for the period are released on Jan. 27, said Jefferies analyst James Grzinic.

“We won’t know until late January the full extent to which pressured gross margins and accelerating opex (operating spending) inflation conspired to hit earnings delivery,” Grzinic wrote.

Zara owner Inditex on Wednesday reported a 19% jump in net profit for the nine months from February to October but said sales growth had slowed to 11% in the final three months of that period, reflecting a weakening consumer environment.

“The H&M group’s operations in Russia and Belarus were wound up during the quarter, with the remaining stock being sold off and the last stores having closed on 30 November,” the company said in a statement.

“During the quarter around 25–50 stores in China were temporarily closed due to new COVID outbreaks.”

Measured in local currencies, sales in the quarter were unchanged, it said.

H&M’s share price is down by 36% year to date, lagging a 12.8% drop in Stockholm’s benchmark stock index and an 11.3% decline for Inditex.

($1 = 10.2119 Swedish crowns)

(Reporting by Stine Jacobsen; Editing by Jason Neely and Mark Potter)