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H&M to open more stores on strong 2009 profits

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H&M to open more stores on strong 2009 profits
10:00 CET+01:00
Swedish discount fashion retailer H&M saw its profits soar past expectations for the last quarter in 2009, causing its share price to rally in Thursday morning trading in Stockholm.

H&M said on Thursday that its net profits rose by a better-than-expected 21 percent to 6.15 billion kronor ($841 million) in the fourth quarter.

Analysts had forecast a fourth-quarter net profit of 5.14 billion kronor.

H&M shares jumped on the news, climbing up 7.6 percent to 433 kronor a share in Thursday morning trading on the Stockholm stock exchange.

H&M's fourth quarter results capped off a strong year for the purveyor of affordable fashion, which also announce on Thursday it would open 240 new stores this year in Europe, Asia and the United States after net profits rose in 2009.

Group profit after tax rose by 7.0 percent to 16.38 billion kronor ($2.25 billion) for the year, compared to 15.3 billion kronor in 2008, H&M said in a statement.

H&M said most of the new stores will be in the United States, Britain, China, France, Germany and Italy.

But it will also open its first store in Seoul in the spring and a second one in the autumn. The company said it would also enter the Israeli market with stores in Tel Aviv, Jerusalem and Haifa.

The clothing group, the third biggest in the world after Gap and Spain's Inditex, which owns Zara, opened 250 new stores in the previous fiscal year between December 2008 and November 2009.

"H&M's growth target is to increase the number of stores with 10-15 percent per year with continued high profitability and at the same time increase sales in comparable units," the group said in its financial statement.

"H&M remains positive towards the future expansion and the company's business opportunities," it said.

The company, which employs 53,500 people, said sales excluding value-added tax amounted to 101.4 billion kronor last year, an increase of 15 percent compared to 2008. In local currencies, sales rose by four percent.

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