• Sweden edition
 
H&M profit hopes tied down by pricey cotton
A file image from H&M's Elin Kling line released in February 2011

H&M profit hopes tied down by pricey cotton

Published: 29 Mar 2012 11:35 GMT+02:00
Updated: 29 Mar 2012 11:35 GMT+02:00

For the December-February quarter, H&M posted a net profit of 2.74 billion kronor ($412 million), up slightly from the 2.62 billion kronor posted for the same quarter a year earlier but falling short of the 2.99 billion analysts polled by the Dow Jones Newswires had expected to see.

Sales meanwhile grew by more than 13 percent to 27.83 billion kronor in the quarter, but the company's gross margin shrank to 55.8 percent from 57. 8 percent a year earlier.

Following the news, the Swedish retailer saw its share price fall 5.43 percent to 237 kronor a pop in early trading on a Stockholm stock exchange down 0.70 percent.

"Despite increased purchasing costs, we have continued to strengthen our customer offering, for example by not raising our prices to customers. This has contributed to strong sales even if, combined with the increased purchasing costs, it has had a negative effect on the gross margin in the quarter," chief executive Karl-Johan Persson said in the earnings statement.

He said the higher purchasing costs were partly due to rising prices for cotton, as well as "long-term investments aimed at broadening our total offering."

Among the projects in progress, he said, was the launch of "a completely new store chain" in 2013, which like the company's mid-range COS brand "will be independent and complement the other offerings from the group."

H&M said its sales during the first quarter had been strong in most markets, and especially in large markets like the United States, Britain, Germany and France, but acknowledged that sales had been weaker in Switzerland, Japan and Greece.

"Many countries are still in a challenging macro-economic situation, with restrained consumption," it explained.

The company meanwhile said its target of increasing its number of stores by 10-15 percent per year remained intact, pointing out that it during the 2011/2012 financial year aimed to open 275 new stores, bringing the total to nearly 2,500, with more than 94,000 employees worldwide.

It also said it this year would enter five entirely new markets: Bulgaria, Latvia, Malaysia, Mexico and, via franchise, Thailand.

AFP/The Local (news@thelocal.se)

Don't miss...X
Left Right

Your comments about this article

14:28 March 29, 2012 by SimonDMontfort
The 'pricey cotton' is only one part of the H&M story. They sacrificed 'margin' to drive sales.

The quite mild early part of the winter led to falling demand for their winter-wear, leaving them with higher than expected inventory.
Today's headlines
Swedish Tetra Pak factory to shut down
Photo: TT

Swedish Tetra Pak factory to shut down

A Tetra Pak factory in southern Sweden is set to shut down due to a decrease in demand, meaning 250 Swedes risk losing their jobs. READ  

The Local List
Ten false friends in the Swedish language
Photo: The Uppsala Koala

Ten false friends in the Swedish language

Never, ever take the Swedish language at face value. This is a language where "puss" means "kiss" and "kiss" means "pee". And that's just the beginning... READ  

Sami museum hit in suspected tear gas attack
Permanent exhibition on the life of Sami nomads. Photo: Bengt Oberger/Wikipedia

Sami museum hit in suspected tear gas attack

The Sami museum in northern Sweden had to be evacuated after two attackers sprayed an unknown substance which left several people violently ill. READ  

Roma advocate scoops Wallenberg prize
Emir Selimi: The winner of the 2014 Raoul Wallenberg Prize. Photo: Charles L. Sjölander

Roma advocate scoops Wallenberg prize

A Roma man has been hailed as "inspirational" after scooping this year's Raoul Wallenberg Prize for setting up an organization to help stamp out racism against the community. READ  

Government keen on Nato forces in Sweden

Government keen on Nato forces in Sweden

Nato will soon be able to deploy forces to Sweden, with the government likely to sign an agreement with the military alliance this week, but an expert told The Local that full membership remains unlikely. READ  

Beggar hit in exhaust fume 'attack'
Exhaust fumes. Photo:Shutterstock.

Beggar hit in exhaust fume 'attack'

A beggar in southern Sweden was forced to flee in terror after she was enveloped with thick black smoke, part of an apparent attack that was captured on video and spread via social media. READ  

Elections 2014
Sweden opens the gates for election voting
Don't forget to vote. Photo:Shutterstock.

Sweden opens the gates for election voting

If you're busy on September the 14th, or simply can't wait to have your voice heard, Wednesday morning marked the opening of the polling booths for early-bird voters. READ  

Whooping cough alert after two infants die

Whooping cough alert after two infants die

The Swedish Public Health Agency has urged parents to be aware of the dangers of the infectious whooping cough disease after two babies have recently died from the illness. READ  

Chuck Berry wins 2014 Polar music prize
Chuck Berry performing in Oslo in 2007. Hakon Mosvold Larsen /Scanpix Norway

Chuck Berry wins 2014 Polar music prize

The Polar music prizes were handed out in Stockholm on Tuesday night, with Chuck Berry and theatre director Peter Sellars sharing one million kronor ($153,000) in prizes. READ  

Swedish store scraps high heels for toddlers
The shoes pictured are indeed the shoes in question. Photo: Joakim Loamotte/TT

Swedish store scraps high heels for toddlers

UPDATED: A social media storm has seen a supermarket chain recalling its heeled children's shoes. The man behind the storm says other countries could learn from how seriously Sweden takes equality. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Society
Meet the man who made a Swedish store recall its high heels for kids
Business & Money
'How I came to run my own business in Sweden'
Politics
Expert explains why Sweden's election oozes uncertainty
National
City plays Schindler's List theme at Nazi rally
Society
For Stockholm Fashion Week, here's the A-Z of Swedish fashion
Blog updates

25 August

Hit och dit, här och där (The Swedish Teacher) »

" Hej igen! A common challenge for Swedish language students are the location adverbs hit/här, dit/där, hem/hemma etc. Some of the location adverbs come in two versions. We should use one type of location adverb when we use a verb describes where we are, and we should use the other type of location adverb when we the verb..." READ »

 

25 August

The Dollar Store (Blogweiser) »

"A dollar store in Sweden. Blog post: http://t.co/tNuuvcP1q0 #USD #greenbacks #sweden #sverige pic.twitter.com/RHFAYf7U1k — Joel Sherwood (@joeldsherwood) August 23, 2014 There’s a chain here in Sweden called The DollarStore. This name always stood out to me in a country where they don’t use dollars. I went there for the first time this weekend. They actually accepted greenbacks..." READ »

 
 
 
National
'Amnesiac' man avoids deportation for ten years
Gallery
Princess Estelle through the years
Business & Money
Swedish city all set for six-hour workday trial
Business & Money
Five golden rules for the Swedish job hunt
Sponsored Article
Graduates: Insure your income in Sweden with AEA
Gallery
People-watching August 22-24
National
Armed royal guards caught (very) drunk on the job
National
Sweden orders textbook on Roma discrimination
Gallery
Violent anti-Nazi demonstrations in Malmö
Society
A closer look at Sweden's five official minority languages
Gallery
See the destruction from the southern Sweden floods
Politics
'Sweden Democrats hold the key to elections'
Society
Swedes celebrate first day of smelly fish season
Politics
Sweden elections: How do they work?
Finest.se
Gallery
People-watching August 20th
Society
Did you know the Bronx in NYC was named after a Swede?
Society
Swedes slam Danes for 'racist' art
National
Majority of Swedes favour more or just as many refugees
Sponsored Article
Find out what gives this Swedish school executive appeal
Society
This gold coin may be the key to solving a Swedish massacre
Skatteverket
Sponsored Article
Introducing... ID cards and permits in Stockholm
Sponsored Article
Introducing...Your finances in Stockholm
Sponsored Article
Introducing...Housing in Stockholm
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Germany

More news from Germany at thelocal.de

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

732
jobs available
Swedish Down Town Consulting & Productions
Swedish Down Town Consulting & Productions is an innovative business company which provides valuable assistance with the Swedish Authorities, Swedish language practice and general communications. Call 073-100 47 81 or visit:
www.swedishdowntown.com
PSD Media
PSD Media is marketing company that offers innovative solutions for online retailers. We provide modern solutions that help increase traffic and raise conversion. Visit our site at:
http://psdmedia.se