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.
"I think that all anyone really wants in life is to have people understand us for who we actually are, despite everything," says Ruth Negga. The actress talks "Preachers" season 2 and more on WWD.com. #wwdeye (📷: Dan Doperalski)
"That's something that resonates with me too because I'm so locked into a number. If I go over that number it completely ruins my day so it's nice to get detached from the number on the scale." - Chelsea Handler on Kelly LeVeque's book "Body Love." #wwdeye (📷: John Salangsang)