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.
Assouline is paying homage to the late Azzedine Alaïa with a reprint of "Alaïa Livre de Collection.” The book is comprised of photographs of the designer's summer 1992 runway show with models Christy Turlington Burns, Naomi Campbell and Tyra Banks, pictured here at right. #wwdfashion #alaia #tyrabanks
Fall 2018 accessories take on a painterly hue, with Nebulas Blue among Pantone’s top 10 colors of the season. (📸: @jonghyupstudio ; editor: @twallz21 ; stylist and set designer: @haideefindlaylevin ) #wwdaccessories
@americanapparelusa is relaunching the brand outside of the U.S. today, opening its online store to more than 200 countries. The company is also contemplating a return to brick-and-mortar, though details have not been confirmed. In tandem with the expanded distribution is a recasting of a social media ad campagn, called “Back to Basics,” pictured here, with a focus on diversity and a cast of models above the age of 21. Read more on WWD.com #wwdnews #wwdfashion
Exclusive: @britneyspears is continuing to expand her brand. The pop icon, who appears in @kenzo ’s latest campaign, is partnering with Epic Rights to launch a line of branded merchandise. Read @hernameislex ‘s story, link in bio. #wwdnews #britneyspears
The Duchess of Cambridge channeled Princess Diana’s look upon giving birth to Prince Harry, when she and the Duke of Cambridge departed the hospital with the new baby Prince this afternoon in London. #wwdeye #princeofcambridge
The new Prince of Cambridge has arrived! The Duke and Duchess of Cambridge posed with the 8-pound newborn. She wore a look from one of her go-to designers, @jennypackham. Tap link in bio for more. #wwdeye #princeofcambridge
Jewelry label @alisonlou has made a name for itself with fine jewelry that speaks to the Millennial market. Now @twallz21 reports that the label is bringing those playful ideas to a new affordable line of lucite hoops with the launch of Loucite by Alison Lou. Here’s a look from the line modeled by @emrata. #wwdaccessories
@sarahjessicaparker and @gilt are teaming up on a bridal ready-to-wear line. Tomorrow, Parker will launch SJP by Sarah Jessica Parker Bridal — and as part of the launch, Gilt will offer 15 exclusive styles from the SJP by Sarah Jessica Parker footwear collection that were designed to complement the new line. Made out of 10 styles, the line is designed for a variety of occasions, from bridal showers to receptions. Get more details on WWD.com #wwdfashion