H&M's second quarter profit meets forecast

Wednesday 18 June 2014 08.56
H&M said its June sales were off to a good start after a near 20% increase in May
H&M said its June sales were off to a good start after a near 20% increase in May

Hennes & Mauritz, the world's second-biggest fashion retailer, said sales in June had gotten off to a good start after reporting second-quarter profits in line with analyst forecasts.

The Swedish budget fashion company competes with the world's biggest clothing retailer Zara-owner Inditex.

It said its spring collections had been well-received and cited strong sales for other H&M brands such as COS, & Other Stories and H&M Home.

It posted a pre-tax profit of 7.6 billion Swedish crowns ($1.1 billion) from March to May, matching analyst forecasts in a Reuters poll.

The group, which has been broadening its product offering and investing in its online business having gotten off to a slow start compared with some rivals, posted a gross margin in the quarter of 60.8% - just below an analyst forecast for 61.2 percent.

"We are seeing some of our long-term investments starting to generate revenues such as & Other Stories and our online store in the US and in France," chief executive Karl-Johan Persson said.

He said the company would continue to make long-term investments. 

H&M, which reported quarterly sales last week, said June sales were off to a good start after a near 20% increase in May. It did not provide further details about its June sales.

Last week, Inditex said its sales rose 11% in local currencies between February 1 and June 8, accelerating from the 8% it recorded in the year to the end of January.

H&M said it would launch an extended shoe range this autumn. It plans to roll out in eight to ten online markets in 2015 after starting up sites in Spain, Italy and China this autumn.