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Hennes welcomes soaring profits

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11:22 CEST+02:00
Swedish mass fashion retailer Hennes and Mauritz (H&M) reported on Wednesday soaring second-quarter profits as its collections were well-received and operating costs were shaved.

Net profit in the second quarter – the three months to May 31 – ticked in at 2.35 billion kronor, up from 1.76 billion kronor for the same period last year.

That translated into earnings per share of 2.85 kronor, up from 2.13 kronor during the March-May period a year ago.

H&M's pre-tax profits meanwhile jumped 34 percent to 3.62 billion kronor, up from 2.71 billion kronor for the year-ago-quarter and slightly above analyst expectations of 3.58 billion kronor.

"Well received collections during the quarter have resulted in an increase in turnover," which rose 17 percent to 15.49 billion kronor, and 18 percent after adjusting for exchange rate changes, the company said.

"The cost control has at the same time continued to work well," it said.

For the first six months of the financial year, covering December to May, H&M posted a net profit of 3.85 billion kronor, nearly 32 percent higher than the 2.92 billion kronor it reported a year ago.

H&M's earnings per share were 4.66 kronor over the period, up from 3.53 kronor.

H&M's gross profit margin meanwhile rose to 60.1 percent, up from 58.4 percent during the second quarter a year ago.

"The strengthening of the gross margin... has been possible due to lower quota costs, lower dollar rate and also lower price reductions which is a result of better collections and a well balanced stock-in-trade," H&M said.

During the first half of the year, the company said it had opened 62 new stores worldwide, bringing its total number of branches to 1,121.

Over the next six months, H&M said it would open another 85 to 90 stores, mainly in the US, Germany, the UK, Spain and Poland.

Eleven stores are to be closed.

AFP

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