STOCKHOLM (AFP) – Shares in H&M surged on Thursday as the Swedish clothing giant reported better-than-expected earnings for its second quarter.
H&M reported a net profit of SEK3.29 billion (USD305 million) for the March-to-May period.
It was down from SEK3.68 billion the year before but above expectations of 2.84 billion kronor in a Bloomberg survey of analysts.
Around midday H&M shares were up over 11 per cent on the Stockholm stock exchange.
“The summer collections have been well received and the third quarter has got off to a good start. The conditions for increased growth as well as profitability continue to develop in a favourable direction,” CEO Helena Helmersson said in a comment.
The company also reported a near five-per-cent drop in operating profit to SEK4.74 billion, but this was also better than analysts’ expectations of SEK4.26 billion.
H&M noted in its report that the operating profit “was negatively impacted as a result of increased raw materials and freight costs combined with a stronger US dollar compared with last year”.
The company also reported a 20-per-cent reduction of its inventory on hand and said it was on course to further reduce its stocks of unsold clothes.
H&M said it planned to open around 100 new stores, while closing around 200.
At the end of May the global retailer had 4,399 stores around the world, a reduction of 303 stores compared to a year earlier.
