Swedish cheap-and-chic fashion giant H&M today posted a net profit up 22.5% in the second quarter, easily beating expectations.
For the March to May quarter, H&M posted a net profit of 5.22 billion kronor (€590m).
This was well above the expectations of analysts, who had anticipated a net profit of 4.84 billion kronor for the quarter.
H&M also saw its sales, excluding VAT, jump 15% in the second quarter, to 31.66 billion kronor from 27.63 billion during the same period a year earlier.
The company, which in recent quarters had posted disappointing results due to high purchasing costs, said today that "overall, the effects of the earlier significantly negative external factors, such as the cotton price, were more or less neutralised."
H&M said it was continuing to expand rapidly, with plans to open 275 new stores during the full year 2012, including in five new markets: Bulgaria, Mexico, Latvia, Malaysia and Thailand. It also has several outlets in Ireland.
The company counted 2,575 stores worldwide at the end of May, and said "China, the US and the UK are expected to be the largest expansion markets for H&M in 2012."
"There are also still great opportunities for expansion in markets such as Germany, France and Italy," it added.
The Swedish retailer said it also planned to launch online sales in the US - "the world's largest online market" - later this year.
One of H&M's main competitors, Spanish Zara, has also said it will launch online sales in the US in the second half of the year.
H&M said its other brands, COS, Monki, Weekday and Cheap Monday, as well as its H&M Home furniture and interior store, were also continuing to expand, and confirmed that it would open a brand new chain next year under the name & Other Stories.
