H&M 2Q profit rises 6.4%, helped by new store openings

Swedish fashion chain Hennes & Mauritz said net profit in its fiscal quarter rose 6.4%, helped by new store openings and a weaker Swedish krona. Europe's 2nd-largest fashion retailer said net profit in the 3 months to May 31, its fiscal 2nd-Q, rose to 4.2B kronor ($534M) from 3.9B in that period in 2008. Sales for the period rose 22% to 31.1B kronor ($4B) from 25.4B, helped by the weaker Swedish krona and new stores. H&M said sales in local currencies rose by 8%, but fell by 2% when excluding impact of new store openings. H&M had 1,822 stores at the end of May, up from 1,593 a year earlier. "The current recession's affected the consumer pattern in all of H&M's markets, especially in Spain, the U.S. & the Nordic countries," it said in a statement. Sales in Japan and Russia, where it entered recently, have "surpassed expectations." H&M said its gross margin for the quarter was 61 percent, down from 62.9 percent in the 2nd-Q last year. It said it remains positive toward future expansion of its business. For the financial year 2008 & 2009 it plans to increase the number of stores by 225, including 15 Monki and Weekday stores and 8 COS stores. H&M shares rose 2% to close at 378 kronor ($48.05) in Stockholm.