H&M Q1 profit rises 45 pct on store expansion
Swedish fashion chain Hennes & Mauritz AB on Thursday said profits rose 45 percent in first quarter, helped by higher sales and an increased number of stores.
Europe's No. 2 fashion retailer said net profit in the three months to Feb. 28, its fiscal first quarter, increased to 3.7 billion kronor ($511 million) from 2.6 billion in the same period a year ago.
Sales, excluding value-added tax, rose 7 percent to 24.8 billion kronor ($3.4 billion) from 23.3 billion. However, the budget chain said sales in local currencies increased by 13 percent and rose 2 percent when excluding the impact of new store openings.
"The spring collections have been well received," H&M said in a statement. "In view of the continued weak economy during the quarter, the company considers that sales have been satisfactory."
The bottom-line result and the company's closely watched gross margin, which rose to 61.9 percent from 56.6 percent, were better than analysts' expectations, while sales were lower than forecast.
H&M had 1,992 stores at the end of February, up from 1,748 a year ago.
It said new store openings in South Korea and Israel had been met with great interest during the quarter and that it plans to open 73 new stores in the second quarter, mainly in the U.K., China, Norway, Denmark and Germany.
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