Stockholm—H&M says it is eyeing expansion into two new markets in the fall as it revealed strong earnings growth in the second quarter.
In the three months to the end of May, net profit climbed 25% to 5.81 billion kroner (about $875.5 million) from 4.66 billion kroner a year earlier. That was in line with analysts’ estimate.
375 New Stores
H&M’s sales including VAT increased in local currencies by 16% during the second quarter. Excluding VAT, sales amounted to 37.83 billion kroner, an increase of 20% on the prior year period.
Gross margin, however, narrowed to 60.8% from 61.1% in the comparable period last year.
CEO Karl-Johan Persson, said: “We have had a good second quarter with a strong increase in both sales and profits and increased market share. We are proud of what we have accomplished so far, even if there is still much to do. We believe that our work with sustainability is also becoming more and more visible to our customers and other stakeholders.”
Looking ahead, H&M said sales in June have got off to a good start and that an extended shoe range will be launched in early fall 2014. Expansion is also on the agenda, with around 375 new stores planned, including in new markets such as the Philippines and India. Eight to 10 new online markets are also planned for the autumn including Spain, Italy and China.