Strong krona strips H&M's quarterly profits
Published: 27 Sep 2012 09:58 GMT+02:00
Updated: 27 Sep 2012 09:58 GMT+02:00
Swedish group H&M, which makes and retails inexpensive clothes, reported almost steady net profit for the third quarter on Thursday, saying the rise of the krona had contained earnings.
Net profit edged up 1.0 percent to 3.622 billion kronor ($790 million). This was less than the figure expected by analysts polled by Dow Jones Newswires who had foreseen 3.94 billion kronor.
H&M said that the rise of the krona and fall of the euro had had a significant effect on the bottom line in its local currency.
Sales rose by 7.0 percent to 28.806 billion kronor, but in terms of the local currencies in which sales were made, the figure had risen by 10.0 percent.
The group said that the business climate for ready-to-wear clothing had remained difficult during the third quarter because in many countries austerity policies were taking effect and consumers were restraining their spending.
In addition, unusually hot weather in August in some European countries had curbed retail sales.
Chief executive Karl-Johan Persson said that the business continued to gain market share and would accelerate expansion of the brand in world markets, intending to open 300 shops this year instead of a previous target of 275.
But the group said that it was delaying the opening of its online retail operation in the United States until the summer of 2013, saying that it needed more time to refine its sales offer on the Internet.
On September 19, the Spanish group Inditex, which owns the rival Zara brand and is the biggest clothing group in the world, reported a profit surge in the first half of 2012 as brands including Zara spread across Asia and the Americas.
Net profits leapt by 32 percent from the figure in the same period of last year to 944 million euros ($1.23 billion).