H&M reports jump in Q2 pre-tax profits
Swedish fashion retailer Hennes & Mauritz has reported a 23% rise in second quarter profits, boosted by strong sales of its spring clothing collection and a stabilisation in cotton prices.
The group made a net profit of 5.22 billion kronor ($745 million) in the three months to 31 May, up from 4.3 billion kronor in the same quarter in the previous year. Gross sales including VAT increased by 14% to 36.9 billion kronor as like-for-like sales rose by 2%.
The group said the price of cotton had stabilised in the quarter which had helped to keep its gross margin in line with a year earlier at 61.7%.
Karl-Johan Persson, H&M chief executive said: "The spring collections have been well received by our customers as shown by our increased market share in a fashion retail market that continues to be challenging."
H&M currently operates 2,575 shops worldwide. Over 90% of group sales come from outside Sweden with 25% generated from Germany, Europe’s largest clothing market.
The retailer said it plans to open around 275 new stores this year and will also launch in five new countries – Bulgaria, Mexico, Latvia, Malaysia and Thailand.
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