H&M disappoints

 

H&M regent St londonSwedish fashion giant, H&M, has posted a slight net profit increase in 2013 from performance in 2012 but has fallen short of forecasts by analysts for the fourth quarter.

Net profit for the fiscal year ending in November 2013 rose by 1.7 per cent to 17.15 billion kronor ($A2.98 billion).

In the fourth quarter (September to November), the net profit increase of six per cent to 5.61 billion kronor missed the expectations of analysts surveyed by Dow Jones Newswires, who had forecast a 14.0-per cent increase.

H&M’s sales grew only thanks to an increasing number of stores and the launch of new online shopping sites.

Last year, the firm passed the 3000-store mark and is currently above 3100, with its first shop in the southern hemisphere inaugurated in 2013 in Santiago de Chile.

Annual sales increased by six per cent to 150.09 billion kronor with especially positive results in the fourth quarter, where they grew by 12.0 per cent to 42.61 billion kronor.

“The financial year 2014 has got off to a good start, with strong sales development in December and January,” the company said in a statement.

“Although there are still macro-economic challenges in several of our markets, we are optimistic about 2014.”

H&M said its 2013 results were affected by “major long-term investments”, “increased price markdowns” compared to a year earlier and “negative currency translation effects of around 600 million kronor”.

The Swedish firm said its growth target remained “intact”, with a 10 to 15 per cent shop increase per year.

In 2014, Australia and the Philippines will get their first H&M stores, and the company says their expansion will be particularly strong in China and the US.

Germany was the company’s first market in 2013, with a four-per cent sales increase in euros, followed by the US (13 per cent in dollars) and France (eight per cent in euros).

H&M and Spanish competitor Inditex (Zara) battle for dominance in the global fashion industry.

Amancio Ortega’s group will publish its results on March 19.

AFP

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