H&M quarterly profits soar on 'strong' sales

H&M quarterly profits soar on 'strong' sales
Above: Karl-Johan Persson, chief executive officer of fashion retailer Hennes and Mauritz (H&M)

STOCKHOLM - Swedish fashion giant H&M Wednesday said profits soared in the second-quarter as it continued a major global expansion, and announced it would launch a broader footwear range later this year.

Net profit in the second quarter rose 25 per cent from the March-May period a year earlier to 5.8 billion kronor (645.3 million euros, US$874.5 million, S$1 billion).

That slightly beat the prediction of analysts polled by Dow Jones Newswires, who predicted a 5.63-billion-kronor profit.

Chief executive Karl-Johan Persson said in a statement the positive results came from "well-received collections and continued strong expansion", together with "good cost control".

Revenue grew by 19 per cent to 44.18 billion kronor compared to the same period in 2013.

All the group's brands - H&M, COS, & Other Stories, Monki, Weekday, Cheap Monday and H&M Home - showed "good" sales development during the quarter, Persson added.

The group also announced a larger shoe range for men, women, teenagers and children, which will be available in the autumn in nine countries and online shops.

"This is a part of our long-term investments which also includes investments in online, IT and our new brands," Persson said.

H&M's growth strategy includes increasing its number of outlets by 10 to 15 per cent each year, while maintaining high profitability, according to the group.

This year, the company expects to open 375 new outlets, mainly in the US and China.

Besides Australia, where the first shop opened in April, H&M plans to expand to India and the Philippines in the autumn.

By the end of this year, Spain, Italy and China will also have online H&M shops.

H&M pointed to weather situations, negative macro-economic changes and external factors in production countries as possible future risks.

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