STOCKHOLM (Reuters) – Sweden’s H&M reported stronger-than-expected second-quarter profit on Thursday and said it had gotten the summer season off to a good start as the company tries to catch up with its rivals.
In the period from March to May, the world’s second largest fashion retailer reported an operating profit of 4.74 billion Swedish crowns (402.73 million euros).
A figure down from 4.98 billion Swedish crowns posted a year ago, but higher than the average analyst forecast of 4.07 billion Swedish crowns, according to data from Refinitiv.
H&M, which lags behind Zara owner Inditex, is looking to go more fashionable and bolster its Cos brand. More expensive, the latter targets consumers least affected by the rising cost of living, while fast fashion giant Shein is taking market share with cheap clothes.
“The summer collections were well received and the third quarter got off to a good start,” said Helena Helmersson, group chief executive, in a statement.
“The conditions for increased growth and improved profitability continue to evolve favourably,” she added.
H&M’s second-quarter operating profit margin was 8.2%, down from 9.2% a year earlier. The group reiterated its target of a 10% margin next year, which analysts said could be difficult to achieve.
Local currency sales for the period June 1-27, the first month of the third quarter, were up 10% from a year ago.
H&M last year announced the cut of 1,500 jobs and other measures aimed at reducing its costs.
(Report Marie Mannes; Victor Goury-Laffont, edited by Kate Entringer)
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