Swedish fashion giant H&M - the world's second-biggest clothing chain - has posted a 61% profit fall for the three months to February amid weak sales.
Its outlets, which include mid-market chains & Other Stories and Cos, made 1.26bn Swedish crowns (£108m).
Stock levels were 8% higher than a year ago, partly because of an increase in stores but also thanks to slower sales.
It said it had more unsold stock than last year and that would mean further discounts in the next three months.
Recently it warned of weaker demand in some stores and also said sales had fallen for the second quarter in a row.
Shares fell 5% in early trading to their lowest level since 2008.
H&M employs 171,000 people worldwide in its 4,700 stores.
It has outlets in 69 countries, with the US, Germany and the UK its top three markets by number of stores.
This year it is planning to open 220 new stores. Most will be H&M stores, but 90 will be its newer spin-offs including & Other Stories, Cos and Monki.
H&M said the rise in stock levels was higher than planned, and would mean "increased markdowns" in the second quarter of 2018 compared with last year.
However, the retailer said it expected sales and profits to return to growth. "We take a long-term view that, together with our knowledge and experience enable us to navigate through times such as this... back to healthy growth in both sales and profitability."