H&M profit up 20% in third quarter
Swedish fashion retailer H&M saw its operating profit rise by 20% in its third quarter as its new collections helped to drive strong sales and increased market share.
In the three months to 31 August, group sales including VAT increased by 16% in local currencies. Converted into SEK, sales excluding VAT amounted to SEK 38,805 million, an increase of 21% from SEK 32,040 million last year.
The retailer said its online businesses in Italy and Spain, which were launched in August, had both made a “very good” start.
However, sales in the period 1 September to 23 September slowed, increasing by just 7% in local currencies compared to the same period last year. H&M said sales had been affected by unusually warm weather in most of its markets.
H&M will make its debut in The Philippines next month although its opening in India has been postponed from this autumn until 2015. Next year H&M will enter South Africa, Peru, Taiwan and Macau.
H&M chief executive Karl-Johan Persson, said: “We have continued to gain market share thanks to strong sales development for all our brands. We see this as proof of well-received collections. Combined with our expansion, this led to a sales increase of 21% in SEK in the quarter. Also the good growth in profits continued with an increase in operating profit of 20% - while we at the same time are in a very intensive investment phase to build an even stronger H&M.
“Our store expansion plan for 2014 remains intact, with a planned net addition of 375 new stores. During the summer, we opened another flag ship store on Fifth Avenue in New York.
“We are looking forward to a busy and exciting autumn. Besides our store and online expansion, we are continuing to develop our customer offering including the broadening of H&M Sport and our extended shoe range, which will be available online as well as in selected stores during the autumn.”
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