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Reuters
Published
Sep 24, 2009
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H&M third quarter pretax tops consensus, August sales tumble

By
Reuters
Published
Sep 24, 2009

STOCKHOLM, Sept 24 (Reuters) - Hennes & Mauritz (HMb.ST), the world's third-biggest clothing retailer by sales, posted on Thursday 24 September a slightly bigger rise than expected in third-quarter pretax profits, but its August sales fell more than forecast.


H&M autumn 2009 - Photo: www.hm.com

Pretax earnings in its fiscal third quarter, ended Aug. 31, amounted to 4.77 billion Swedish crowns ($695 million) compared with a mean forecast of 4.75 billion in a Reuters poll of analysts and a year-ago 4.59 billion.

But total sales in August fell 3 percent year-on-year versus a consensus forecast for a 5 percent rise while turnover in stores open a year or more fell 11 percent versus a forecast fall of 5 percent.

"Weak sales were mainly due to continued recession with restrained consumption, tough price competition and unusually warm weather in many parts of Europe in the end of the quarter," H&M said. In the quarter in total, sales increased 13 percent.

"During the recession the customers have become more attracted to markdowns. H&M's summer sale sold out quickly resulting in fewer markdown items left for H&M in August compared to the market in general."

H&M raised its expansion target for the full year to around 240 stores net from its previous target of 225 stores.

The budget fashion retailer's quarterly gross margin rose to to 61.6 percent from 60.8 percent, topping a forecast 60.0 percent.

($1=6.867 Swedish crowns)

(Reporting by Anna Ringstrom; Editing by Mike Nesbit)

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