Budget fashion retailer H&M today reported a smaller than expected decline in pretax profit for the latest quarter as tight control of costs helped to offset the impact of soft sales.
H&M is the world's second-biggest fashion company after Zara owner Inditex.
It also said today that it would launch a new slightly more upmarket brand in the second half of the year.
H&M said conditions remained very tough in many key European markets and in the US, with rapidly changing shopping behaviour and expectations.
Pretax profit in the December-February period fell to 3.21 billion crowns ($361.5m) from 3.33 billion a year earlier.
This compares to a mean forecast for 2.87 billion seen in a Reuters poll of analysts and the increase was helped by cost control and currency translation effects.
"To meet the rapid change that is going on in fashion retail we need to be even faster and more flexible in our work processes, for example as regards buying and allocation of our assortment," chief executive Karl-Johan Persson said.
"We are therefore investing significantly in our supply chain, such as in new logistics solutions with greater levels of automation, but also in optimising our lead times," he added.
H&M said local-currency sales in the first 28 days of March, the first month of its second financial quarter, were up 7%.
H&M, which is branching out into new concepts to reach a broader customer base and to reduce exposure to the increasingly crowded budget segment, said its new separate chain of stores would have a slightly higher price range than its core budget H&M brand.
It would, besides offering clothes under its own brand ARKET, also sell brands made by third parties, it added.
