H&M Drops as Surging Costs Nearly Wipe Out Earnings

Hennes & Mauritz AB shares fell after the Swedish clothing retailer said burgeoning energy, freight and garment prices nearly wiped out profit in the past quarter.

Operating income dropped 87 percent to 821 billion kronor ($80 million) in the three months through November, H&M said Friday, far off analysts’ estimates. The stock fell as much as 7.9 percent.

The scale of the decline is so big that investors will doubt chief executive officer…