H&M sees quarterly profits jump

H&M logo Image copyright AP

Swedish fashion retailer Hennes & Mauritz (H&M) has said "strong" store and online expansion led to improved sales and profits in the first quarter.

The firm, one of the world's biggest fashion retailers, reported net profits of 3.6bn Swedish kronor ($423m; £284m), up 36% from a year earlier.

The company said its collections had been "well-received" in the December-to-February period.

H&M plans to open about 400 new stores in the 2014-15 financial year.

"We have made a very good start to 2015 - in terms of both sales and profits," said H&M chief executive Karl-Johan Persson.

"Our attractive customer offering and strong expansion both through stores and online, as well as our work on continuous improvement, are among the reasons for increased market share gains and good profits," he added.

However, the company warned that it could be hit by currency movements, noting that "the strong US dollar will affect our sourcing costs going forward".

H&M makes most purchases in US dollars, and has a large share of sales in euros, so some analysts are concerned that margins will be affected by the dollar's appreciation against the euro.

Expansion plans

In the first quarter, sales increased by 15% in local currencies, and by 25% in Swedish kronor, to 40.2bn kronor.

The company said it planned to open new stores in Taiwan, Peru and Macau in the first half of 2015, and in South Africa and India in the second half.

H&M also said it planned to open online markets in Portugal, Poland, the Czech Republic, Romania, Slovakia, Hungary, Bulgaria and Belgium in the spring, and Switzerland in the autumn.

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