Shares in Hennes & Mauritz AB rose sharply Wednesday after the Swedish fashion retailer reported a 14 percent increase in second-quarter net profits, boosted by a strong pickup in May sales and lower buying costs.
Europe's second-largest clothing retailer said net profit increased to 3.94 billion kronor ($653 million) in the second quarter from 3.47 billion kroner a year earlier.
H&M shares rose 7.19 percent to 343.00 kronor ($56.87).
The company said the continued weak U.S. dollar led to lower buying costs. This was partly offset by slightly higher discounting and increased transportation costs.
Sales for the period ended May 31 increased by 8 percent to 21.61 billion kronor ($3.6 billion) from 20.05 billion in the same period in 2007.
The result was helped by a strong pickup in sales in May, after weak sales in March and April. Sales for May rose by 25 percent in local currencies compared with the same month last year.
The company said the sales development during the quarter directly coincided with weather conditions and shows how weather-sensitive the textile business is.
Evli Bank analyst Anders Wiklund said the results were much better than forecast.
"It was a very good report overall," he said and added that fears that H&M would build up too much stock due to the low sales in March and April were now gone.
Hennes & Mauritz said overall second-quarter sales in local currencies decreased by 2 percent in stores that have been open for more than a year.
On May 31, the total number of H&M stores had increased to 1,593 from 1,420 a year ago.
The company said it plans to expand the number of stores by a further 139 during the remainder of the year.
No comments:
Post a Comment