Hennes & Mauritz, the world's second-biggest fashion retailer, today reported a bigger fiscal first-quarter pre-tax profit than expected but said the strong dollar would increasingly affect its sourcing costs this year.
The Swedish budget apparel firm also said sales in March were up 9% in local currencies.
In the three months to the end of February, H&M said its pretax profit grew to 4.7 billion crowns ($551m) from 3.49 billion a year earlier. The mean forecast in a Reuters poll of analysts had been for a profit of 4.4 billion.
The company said good reception of its collections as well as store and online expansion helped boost market share and profits.
H&M said that while its purchasing costs would rise throughout the year due to the strengthening of the US dollar, it would "still make sure it has the best customer offering in each individual market".
This implies it may not pass on the cost to customers in the form of higher prices.
H&M is widely seen growing at a healthy pace this year as it plans to open 400 new stores and roll out e-commerce in nine more markets.
But because H&M makes most purchases in US dollars while it has a large share of sales in euros, analysts fear margins will be increasingly dented this year by the dollar appreciation.
