PARIS — Hennes & Mauritz of Sweden on Wednesday posted better than expected third-quarter profits, lifted by fewer markdowns and higher prices.
Europe's largest specialty retailer said earnings in the three months ended Aug. 31 climbed 36 percent to 3.32 billion Swedish kronor, or $434.1 million, from 2.45 billion kronor, or $326.3 million, a year ago, while sales rose 18 percent to 15.16 billion kronor, or $2 billion, from 12.83 billion kronor, or $1.7 billion. Dollar figures are at the average exchange rate.
Sales in August gained 17 percent at comparable currency rates, H&M said.
The figures indicate Europe's two fast-fashion giants — H&M and Spain's Inditex, which runs the Zara chain — continue to defy Europe's sluggish retail environment, dogged by high unemployment and weak consumer confidence.
Last week, Inditex said its Zara stores propelled third-quarter profits ahead 40 percent as sales gained 21 percent.
H&M is also making progress in the U.S.
Carl-Henric Enhorning, head of investor relations, said on a conference call the retailer turned a "small profit" in the quarter at its U.S. operations after a "small loss" last year.
Through the first nine months, H&M christened 76 new stores, including five in the U.S. and two in Canada. By yearend, the company expects to have opened 126 new doors.
Enhorning said average prices increased about 1 to 2 percent in the quarter, as more "dressy and tailored" items and "better quality garments" infiltrated the mix.
H&M also recently launched a premium denim collection — &Denim — underscoring the retailer's efforts to move quality and prices slightly upscale.
Enhorning said sales of the autumn collection had started well. He said the company expected a windfall from the one-off Stella McCartney designed collection that would be introduced in November.
Last week, H&M ditched an advertising campaign slated to launch McCartney's designs after the model, Kate Moss, become involved in a scandal over her alleged drug use.
Though H&M's results came in ahead of analysts' expectations, the firm warned that the revival of some quota regulations would "make the buying process more difficult" and have a "negative influence on [short-term] gross profit."Enhorning said garments that were held hostage in European ports earlier this year during a quota snafu now all had been delivered.
H&M sources about 60 percent of its production in Asia, with half of that sourced in China, and the rest sourced in Europe.
Enhorning said H&M already had moved some of its production from China to neighboring Asian countries.
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews
“Stranger Things” is getting a new cast member for season 2. Meet @sadiesink_, the 15-year-old who will be joining the Netflix series for its new season. You may recognize her from “The Glass Castle” with Brie Larson and Woody Harrelson, but the Texas native’s next role goes in an entirely different direction. She describes her character, Max, as “a rough and tumble skater girl [who] becomes friends with the boys at school.” The second season debuts on October 27. (📷: @jgreenery) #wwdeye
Amid the Harvey Weinstein controversy, there’s another sector that’s being put under the spotlight for sexual abuse: the modeling industry. While rumors about abuse and sexual harassment of female and male models — and the photographers, agents and others who perpetrated it — have circulated within the fashion world for years, model @cameronrussell started posting stories from models on Instagram last week about abusive situations they’ve encountered — from sexual harassment and molestation to attempted rape. Over 75 have weighed in so far. Read more on WWD.com. Link in bio. #wwdnews
To celebrate its 16th anniversary, @dylanscandybar tapped designers and celebrities to create mosaics out of candy. The mosaics will be auctioned off to support the philanthropic cause of each participant’s choice. Pictured here is the mural created by @aliceandolivia's Stacey Bendet. For a first look at some of the other artwork being unveiled tonight, go to WWD.com. #wwdeye
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye