Hennes reports increased profits

Swedish Clothing giant Hennes & Mauritz has reported increased profits for the third quarter. The company earned 4.4 billion kronor in the period June-August, compared to 3.8 billion in the same period last year.

Turnover was 18.7 billion, compared to 16.8 billion in the third quarter of 2006.

The results look set to disappoint analysts: Reuters reports that average expectations were of profits of 4.6 billion kronor.

Sales in August were weaker than expected, but were good for June and July, and sales so far in September have been “very satisfying”, H&M wrote in its report.

Gross margins for the quarter were up 2.0 percentage points compared with the same period last year, reaching 61.2 percent. The increase was explained by more effective purchasing, a favourable dollar exchange rate and fewer price reductions, the company said.