SWEDEN: H&M plans expansion as Q2 earnings climb
- Q2 earnings up 25% to SEK5.81bn
- Sales grow 20%
- Gross margin narrows to 60.8%
- Eyeing expansion into new markets
H&M said sales in June have got off to a good start
Fashion retailer H&M Hennes & Mauritz says it is eyeing expansion into two new markets in the autumn as it revealed strong earnings growth in the second quarter.
In the three months to the end of May, net profit climbed 25% to SEK5.81bn (US$875.5m) from SEK4.66bn a year earlier.
Group's sales including VAT increased in local currencies by 16% during the second quarter. Excluding VAT, sales amounted to SEK37.83bn, 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, the company said sales in June have got off to a good start and that an extended shoe range will be launched in early autumn 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 ten new online markets are also planned for the autumn including Spain, Italy and China.
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