Hennes and Mauritz grows but misses expectations

Swedish clothing giant H&M on Thursday reported strong fourth quarter and full-year growth but saw its share price dip amid disappointment that its results were slightly below analyst expectations.

The group said net profit in the September-November period increased 22.5 percent to 4.65 billion kronor (€493 million) from 3.78 billion kronor for the same quarter last year.

Sales meanwhile rose 17.6 percent to 26.84 billion kronor.

For the full year period running from December 1st, 2006 to November 30th, 2007, the company, renowned for its low price but fashionable clothing, reported a 25.8 percent rise in net income to 13.59 billion kronor, as sales rose 15 percent to 92.12 billion kronor.

“The financial year has been characterized by a very good sales development with well received collections,” H&M said in a statement, adding that sales had even been strong in countries where the retail sector in general had been weaker.

“Especially pleasing is the strong sales development in Germany, H&M’s largest market,” the company said, pointing out that its annual sales in that country alone had soared 9.7 percent to 22.15 billion kronor.

The clothing goliath said it at the end of the reporting period counted 1,522 stores around the world, and that it planned to launch 190 new shops by the end of November this year.

Despite its strong performance, H&M’s stock price opened 3.66 percent lower at 316 kronor a share on the Stockholm stock exchange as investors expressed disappointment that its results fell somewhat short of analyst expectations.

The company reported profits before tax but after financial items of 6.2 billion kronor for the fourth quarter, while analysts polled by SME-Direkt had expected it to post profits of 6.6 billion, according to Thomson Financial News.