PARIS — Sweden's Hennes & Mauritz on Thursday said fourth-quarter profits grew 14 percent and eased concern its business would wilt in the tough economic environment by reporting sales in January increased 16 percent.
The fast-fashion giant said profits after financial items for the three months through Nov. 30 reached 6.22 billion Swedish kronor, or $949.5 million, from 5.44 billion Swedish kronor, or $752.6 million, a year ago, below analysts' expectations.
Sales in the quarter grew 17 percent to 22.82 billion Swedish kronor, or $3.48 billion, propelled by robust business in China and Eastern Europe. On a comparable basis, sales gained 5 percent, H&M said. Currency conversions were made at average exchange rates for the respective periods.
"It was a strong quarter," Nils Vinge, H&M's investor relations manager, said in a conference call. Vinge added H&M would open its first stores in Russia, in and around Moscow, starting in 2009.
H&M's full-year profit climbed 21 percent to 19.17 billion kronor, or $2.83 billion. Still, the company's ability to weather a slowdown in consumer spending has put H&M's stock under pressure in recent months. Morgan Stanley earlier this week double-downgraded the retailer from "overweight" to "underweight" and revised its target price from 480 Swedish kronor, or $75.36 at current exchange, to 290 Swedish kronor, to $45.53, citing worries that the company would be squeezed by a dive in consumer confidence, particularly in Europe and the United States.
H&M shares gained 4.3 percent Thursday to close at 342 Swedish kronor, or $53.69, in trading on the Stockholm Stock Exchange.
Vinge said H&M was "not concerned as we go into 2008. It's a tough market every year." He said sales in December grew 10 percent, followed by the robust growth so far in January.
Still, he suggested sales in the British market had cooled. "There was no big increase in the U.K.," he said, adding that the company had seen similar trends in the U.S. "Like-for-like in the U.S. and the U.K. was positive," he added.H&M has profited from expansion into fast-growing markets like Asia and the Middle East. Vinge said sales had been "spectacular" in the stores H&M opened last year in Shanghai and Hong Kong, with handsome business coming from the Middle East, too.
Continuing its global assault, H&M plans to open its first stores in Tokyo later this year. The chain expects to open another 190 units over the next 12 months, including new franchise boutiques in Egypt, Saudi Arabia, Bahrain and Oman.
Vinge said much of the chain's expansion was earmarked for the U.S., Spain, the U.K., France, Germany and Italy.
He said four new COS stores, which offer higher-priced fashion, were expected to open over the year, and that the launch of a home line, postponed last year, should proceed in the next 12 months.
@pantone announced their Color of the Year 2018: Ultra Violet. Nearly 20 months after the musician Prince’s death, fashion is having a purple moment. Varying shades of purple appeared on spring or fall runways, from @christopherkane to @calvinklein. @gucci’s Alessandro Michele bathed his fall runway in ultra violet-colored light at one point. Pantone 18-3838 is meant to “push the boundaries of what inspires us to look upward and outward to the future.” #wwdnews #wwdfashion (📷: @kukukuba)
@badgalriri’s @fentybeauty launch in September was a massive success on social media, powering $72.9 million of earned media value, according to Tribe Dynamics. The brand’s foundation offering sparked conversations about diversity in beauty, launching the growth of emerging influencers and propelling the brand’s support on social media. Today, #fentybeauty won Launch of the Year at the WWD #BeautyIncAwards. (📷: Chema Moya/EPE-EFE)
@marianna_hewitt has become one of the most influential content creators in the beauty space, with almost 800,000 Instagram followers and a newly launched skin care line called @SummerFridays. Today, she was awarded Influencer of the Year at the WWD #BeautyIncAwards. (📸: @sophiachabbott )
As shopping behaviors evolve, the retail experience must follow. Head over to retail experts @colliersinternational’s Knowledge Leader series to read more about the shift in our shopping era. #colliersretail #lovecolliers
@prada opened a pop-up club, called Prada Double Club, in collaboration with German artist Cartsen Höller at @artbasel Miami. Last night, guests – including @youngparis, @ritaora and even Miuccia Prada herself – gathered in a former ice factory where the pop-up is housed for a performance from @wyclefjean. Go to WWD.com for full coverage on all the exhibits, parties and more at #ArtBaselMiami. #wwdeye (📷: @lexieblacklock)
@louboutinworld and @disney are making magic once again, creating a set of shoe designs for the release of “Star Wars: The Last Jedi.” Louboutin designed a pair of shoes for each of the film’s four female leads: Rey (@daisyridrey), Vice Admiral Amilyn Holdo (@lauradern), Captain Phasma (Gwendoline Christie) and Rose Tico (@kellymarietran). The shoes will debut on Saturday at the L.A. premiere of the latest episode. #wwdfashion
Today at the #BeautyIncAwards 2017, WWD will be joined by beauty leaders from around the world as we honor this year's most innovative people, products, brands and places. Follow along here and on Twitter for live coverage from the exclusive event. #wwdsummits (📷: @elizaflorendo)
Exclusive: Beauty superinfluencer @marianna_hewitt is launching her first-ever skin care brand with her business partner @laurengores. Their new line Summer Fridays, which will be sold exclusively at summerfridays.com starting in January, is launching with just one product – a hydrating cream Jet Lag Mask. “We wanted to focus on one product that was amazing,” said Hewitt. Read the full interview on WWD.com. Link in bio. #wwdbeauty #wwdnews
Michelin star-rated chef PJ Calapa marks his first solo endeavor with today’s opening of @scampinyc –– the new Southern Italian restaurant located in Manhattans’ Flatiron District. The upscale yet welcoming environment matches the menu, which includes two types of scampi: traditional Italian langoustines in butter and the Americanized version with shrimp over pasta 🍤 - pictured here. #wwdeye (📷: George Chinsee)