PARIS — Hennes & Mauritz on Thursday said store openings and lower buying costs boosted first-quarter profits by 28 percent, illustrating the Swedish fast-fashion giant’s ability to log impressive growth in a challenging market.

This story first appeared in the March 28, 2008 issue of WWD. Subscribe Today.

H&M said group profits after taxes in the three months through Feb. 29 reached 2.94 billion Swedish kronor, or $458.7 million at average exchange, as sales advanced 18 percent to 19.74 billion Swedish kronor, or $3.1 billion.

The Stockholm-based firm said, “well-composed collections and expanded Internet and catalogue sales and a slightly positive calendar effect” drove the growth. H&M recently has expanded its e-commerce and mail-order activities. The catalogues in Germany and Austria launched in January and have been “developing very nicely,” said Nils Vinge, head of investor relations.

H&M said the sinking value of the dollar, which has hit historic lows against the euro and kronor, positively affected the firm’s accounts. “The development of the U.S. dollar exchange rate has led to lower buying costs,” said H&M, which outsources the majority of its production in Asia, where prices generally are posted in dollars.

Sales in the U.S. in the quarter gained 15 percent to 1.37 billion kronor, or $213.7 million. Growth was robust in most markets, except the United Kingdom, where sales grew 6 percent in local currency, but were flat after conversion into kronor.

H&M said it would open 54 stores in the second quarter. For the year, the chain said it plans to inaugurate 190 units. H&M stock rallied 7.84 percent Thursday to close at 364.50 kronor, or $61.06, on the Stockholm stock exchange.