By Anna Ringstrom

STOCKHOLM (Reuters) – H&M reported a 23% rise in first quarter sales on Tuesday, which was in line with market expectations, as the world’s second-biggest fashion retailer attempts to build on its recovery from the COVID-19 pandemic.

Shares in Sweden’s H&M, which did not give any comment in its statement, were down 3% in early trade as analysts focused on the potential impact of the Ukraine crisis on its business in Central and Eastern Europe and wider global repurcussions.

Net sales in H&M’s fiscal first quarter from December through February, its seasonally slowest, were up by 18% in local currency terms, at 49.2 billion crowns ($5.13 billion), compared to an average forecast from analysts polled by Refinitiv of 49.1 billion crowns.

Credit Suisse (SIX: ) opined that these figures suggested a decrease in local-currency-sales growth to about 14% in February, compared with the 20% reported previously in December-January.

H&M earlier this month temporarily closed its stores in Russia, which last quarter accounted for 4% of group sales, joining a growing list of international companies shunning the country over its invasion of Ukraine.

RBC analyst Richard Chamberlain said he had cut profit estimates for H&M for this year and next by around 10%, pointing to the Russia store closures but also the fact Central and Eastern Europe account for some 12% of group sales.

Less than a month before Russia invaded Ukraine, H&M had drawn a line under the pandemic, and several tough years before that, reporting a jump in profit and saying it was hiking investments with the aim of doubling sales by 2030.

Credit Suisse analysts noted that while Russia accounts for a small share of H&M’s sales, the Ukraine crisis could result in a material effect on global disposable income and demand.

Russia calls the actions it took in Ukraine “special military operations” and has offered to nationalize assets from foreign businesses that flee in the face of economic sanctions.

H&M will publish its full quarterly earnings report on March 31. The biggest competitor Inditex Zara’s owner (MC:) is expected to release quarterly results in March 16.

($1 = 9.5890 Swedish Crowns