Each year we travel to Europe around this time to meet with subscribers and clients and get the latest news from our youth culture researchers and field reporters. One of the most obvious changes is the unseasonably warm weather in most of Western Europe.

The good news is that more people are outside, riding bikes, sunbathing by the Seine, or simply walking the streets to soak up the environment. But for retailers, which are in full Fall/Winter display mode, the heavy wool winter collections displayed everywhere, sadly, are about as enticing as wearing flannel footy pajamas.

The disconnect in terms of fashion retail and the reality of the weather and consumers is once again at a major crossroads. As our European reporters stated after interviewing many young people in various cities hit by the heat, retailers could do better by extending window displays and offerings with summer gear–no matter if it’s October.

H&M which just reported a near 15% drop in Q3 net profits is a major fast-fashion retailer to feel such effects. The Stockholm-based company noted the hot weather as a problem, and the ongoing debate of discounting.

As we’ve noted in our Fall Youth Culture Study 2011, today’s youth culture market is very different in terms of their shopping patterns and many fashion brands and retailers are having a hard time catching-up to the new, real, landscape of which full retail pricing circa 2008 isn’t a part of the scenario any longer.

According to H&M CEO Karl-Johan Persson, “In this situation, it is extra important to have a long-term perspective and to always make sure that we give customers the best combination of fashion and quality for their money in every market.”

That being said, H&M has changed plans and will add 265 new stores including Indonesia and Thailand rather than 250 that were originally scheduled.

Temps are supposed to fall later in week, but it will be too late for most Q3 financial reports from European retailers caught in Fall/Winter mode despite it being summer-like in October.