PARIS — Specialty retailer Hennes & Mauritz posted a 34 percent surge in profits on robust sales because of its well received spring-summer collection.
For the quarter ended May 31, the Swedish fast-fashion giant said profits hit 3.62 billion Swedish kronor, or $514 million, on sales that climbed 17 percent to 15.49 billion kronor, or $2.2 billion. Dollar figures are at the average exchange rate. Excluding currency fluctuations, revenues would have risen 18 percent.
The retailer's operating profits spiked 22.8 percent — its highest increase in a second-quarter period ever — to 3.53 billion kronor, or $501.2 million, because of lower quota costs, dollar rates and price reductions.
For the first half of the year, profits after certain financial items climbed 32 percent to 5.93 billion kronor, or $841.9 million, on sales that rose 12 percent to 28.1 billion kronor, or $3.99 billion.
During a conference call with financial analysts on Wednesday, investor relations chief Carl-Henric Enhorning said the average selling price of H&M-branded goods was up 3 to 4 percent in the spring-summer collection, and that he expects a similar increase this fall.
"We have extended the range to include tailored garments, making the average price a bit higher than last year," said Enhorning, adding that improved quality and a more elaborate denim collection drove average retail prices upward as well.
However, prices of H&M's lower-cost items dropped by as much as 2 percent, according to Enhorning.
Sales in Germany, which had been the group's Achilles' heel because of a morose economic climate, increased 18 percent. In the U.S., sales showed a 13 percent uptick.
H&M executives plan to open 85 to 90 stores this year, with a focus on markets in the U.S., Germany, the U.K., Spain and Poland. This fall, the company plans to open a store in San Francisco.
A Stella McCartney sketch of a custom dress made from protein-based silk in partnership with biotech lab Bolt Threads. The dress will be displayed at The Museum of Modern Art's upcoming design exhibition, "Items: Is Fashion Modern?"