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Hennes & Mauritz reports profits hike

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13:49 CEST+02:00
Swedish clothing retailer Hennes & Mauritz (H&M) has reported a lift in profits for the first fiscal quarter to 5.05 billion kronor ($690 million) as the firm confirmed plans to continue its global expansion.

In the corresponding period of last year the firm reported profits after financial items of 3.55 billion kronor.

The firm exceeded analyst profits forecasts of 4.5 billion kronor for the December-February period.

Turnover amounted to 24.85 billion kronor compared with 23.3 billion a year earlier.

Gross profit increased from 13.2 billion to 15.4 billion kronor with gross profit margins thus up 56.6 to 61.9 percent, which was much better than expected.

February sales climbed 10 percent in local currencies, compared with February last year; sales in March rose 21 percent.

The company has had more sales this quarter compared with the corresponding quarter a year earlier which negatively affected gross margins by 1.6 percentage points.

"Given that economic activity remained weak during the quarter, the company considers sales to have been satisfactory. The spring collections have been well received. Turnover excluding VAT converted into kronor increased by 7 percent. In local currencies sales increased by 13 percent, and in comparable units, by 2 percent," said CEO Karl-Johan Persson in a company statement.

The cut-price fashion group opened ten new stores worldwide during the first quarter, while six stores were closed. At the end of March the firm operated 2,018 stores worldwide, up from 1,767 at the corresponding point of 2009.

Shares in H&M reached an all time high in afternoon trading, up 5.8 percent to 498 kronor by 2pm. Since the turn of the year the H&M B share has climbed 26 percent.

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