H&M sales grow 12% in October
H&M sales increased 12% in October
Swedish fashion giant H&M booked double-digit sales growth in October for the second month in a row, marking its 31st consecutive month of growth.
Sales including VAT increased by 12% in local currencies for the period ending 31 October. This was just above September's rise of 11%, but below Reuters analyst expectations of a 13% increase.
Stifel analyst Richard Jaffe noted: "We believe a return to more seasonable weather, favorable customer response to the company's trend-right, value priced merchandise and the positive benefit of a weakening Swedish krona against most countries' currencies drove sales in the month."
However, he warned that its outlook for November is "cautious", due to the continued shift in consumer spending to 'big ticket' merchandise and experiences, and a likely change in consumer sentiment in Europe following the terrorist attacks in both France and Turkey.
Stifel expects fourth-quarter earnings per share to total SEK3.70, down from its earlier expectations of SEK3.84. In addition, it now forecasts fiscal 2015 and 2016 EPS to be a respective SEK12.98 (from SEK13.12 previously), and SEK14.28 (from SEK14.40 before).
The owner of the H&M, Cos, Monki, Weekday, Cheap Monday, and & Other Stories banners, operated 3,807 stores at the end of the month, up from 3,437 last year.
Earlier this month, H&M pledged to improve labour rights for 1.6m garment workers at its supplier factories – in a move that should also contribute to the creation of more stable sourcing markets.
The retailer, together with the IndustriAll Global Union and Sweden's IF Metall union, signed a global framework agreement to enhance relations and dialogue between employers, employees and unions at the 1,900 or so factories that make H&M products.
Click on the following link to find out more: H&M worker rights pledge supports stable sourcing.
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