STOCKHOLM (AFP) – H&M posted on Thursday a 52-per cent jump in net profit for the second quarter as the world’s second-biggest fashion retailer pressed on with efforts to control costs.
Chief executive Daniel Erver said the company had achieved its “best profit and cash flow for many years” in the April-to-June period, with profit after tax reaching SEK5 billion (USD473 million).
He said the group’s profitability performance was strong in the first half of the year thanks to “gradual improvements in sales development” and “continued good cost control”.
Sales rose by three percent to SEK59.6 billion at the world’s second biggest fashion retailer after Zara owner Inditex.
Its operating profit rose to SEK 7 billion but it was lower than the SEK7.5 billion expected by analysts surveyed by financial data firm FactSet.
“With a sharp increase in profit for four consecutive quarters, we are well on the way to achieving our long-term goal of profitability exceeding 10 per cent over time,” Erver said.
“However, the conditions for achieving that level this year have become more challenging,” he said.
Erver said external factors that influence the group’s purchasing costs and sales revenues, including materials and foreign currency exchanges, “will have a more negative impact than we expected in the second half of the year”.
Sales in June are expected to fall by six per cent compared to the same period last year as “unstable weather” hit many of the group’s large markets at the start of the month, H&M said.
