Stockholm–H&M Hennes & Mauritz AB has kicked off its financial year with a 42% jump in first quarter profit, helped by strong sales of its spring fashions and an early Easter. The company, which is the world’s third largest clothing retailer, warned of the “continued weak economy,”although its second quarter, which began in March, has got off to a strong start.
While February sales were up 10%, those in March accelerated by 21% the retailer said, taking it to a net rise for the quarter of 13% in local currencies. And while same-store sales were down 1% in February, H&M said its sales in comparable units increased by 9% in March.
“There is increased traffic in our stores,” Chief Executive Karl-Johan Persson says. “It looks like private consumption is gaining steam in a lot of our markets.”
Net sales for the group rose 7% in the first quarter to $3.4 billion, up from $3.2 billion a year earlier. Net profit for the three months to 28 February was up 42% to $520 million from $360 million last time. Gross profit rose 17% to $2.14 billion, with gross margins rising from 56.6% to 61.9% as increased markdowns were offset by currency effects. The Swedish retailer, which operates a total of 1,992 stores, also plans to continue to expand its store roster in markets around the globe, with 73 new stores planned for the second quarter, most of which will be in the UK, China, Norway, Denmark and Germany.