Swedish fashion giant H&M has posted a 7% rise in year-on-year sales in January, marking the 34th consecutive month of growth. 

The group today (15 February) said sales including VAT were up by 7% in local currencies, which compares to last year's sales growth of 14% and a 10% rise in December.

The retailer suggested January's sales growth could have been even higher if it were not for a negative calendar effect of around 2 percentage points because the month had one more Sunday than in January 2015.

H&M is also continuing to expand, operating 3,958 stores at the end of the month, compared to 3,541 a year earlier.

Reporting its fourth quarter and full year results at the end of last month, the retailer said unseasonably mild weather had weighed on sales in Europe and North America at the end of the year. The stronger US dollar has also led to higher purchasing costs.

Stifel analyst Richard Jaffe believes that despite the increased costs, "H&M did not pass the cost increases on to their customers in order to be the lower-cost provider and gain market share. We view this as the correct strategy for the company but acknowledge the near-term pressure on earnings."

He also points out that partially offsetting the rising USD exchange rate, is the weakening Chinese yuan. "While H&M sources its merchandise in USD, a weakening yuan helps H&M's buyers to negotiate better sourcing costs, benefiting gross margins."