(News Bulletin 247) – H&M announced Thursday a sharper than expected increase in its profit in the first quarter of its staggered fiscal year, the Swedish group having notably benefited from its cost reductions.

Over the three months ended February 28, its operating profit amounted to 725 million crowns, or a margin of 1.3%, against 458 million – or 0.9% of turnover – a year earlier. .

For comparison, analysts expected a net loss of 1.1 billion crowns.

The world number two in ready-to-wear clothing recorded net sales up 12% in the past quarter to 54.9 billion crowns, including growth of 3% expressed in local currencies.

A widely followed indicator, its gross margin fell to 47.2% compared with 49.3% over the same period of the previous year.

In its press release, the clothing group stresses that its efficiency and cost reduction program is now running at ‘full speed’ and that the changes made in recent years are beginning to bear fruit.

H&M also evokes a good reception reserved for its spring collections.

Over the first three months of the calendar year, that is to say from January to March, its sales in local currencies increased by 4%, a performance lower than the estimates of RBC analysts who were aiming for an increase of 6%. .

‘This marks a slowdown in underlying activity, but H&M attributes it to unfavorable weather’, explains the Canadian broker in a reaction note.

The group has also confirmed that it expects to generate an operating margin of 10% next year, an announcement welcomed by investors since the H&M stock rose by more than 8% this morning on the Stockholm Stock Exchange.

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