Economy. Negative currency effects and adverse weather depressed clothing giant Hennes & amp; Mauritz profit for the split fiscal second quarter, ended in May. But it was not as bad as analysts had feared.
On the stock market, it was thumbs down for the report. After an initial lift drops the H & amp; M share by 0.8 percent on the Stockholm Stock Exchange.
– It has been a challenging six months for the clothing trade, says CEO Karl-Johan Persson at a press conference.
– There are a number of things we could have done better, but we’ve corrected it and see great potential in the continued expansion of both new physical stores and e-commerce markets. We are only at the beginning of our expansion journey.
Better than expected
H & amp; M reported a pretax profit of 7.002 billion kronor for the period from March to May. The corresponding period last year the company made a profit of 8.435 billion crowns.
The result was slightly better than expected. Analysts had on average expected a profit of 6.974 billion kronor, according to Reuters.
In addition to a negative dollar effect squeezed the result of price reductions and costs for ongoing investments, according to Karl-Johan Persson.
– If we look back we could have done better in terms of, for example, activity plan and store operation range, but we are making improvements and believe in a better performance during the second quarter and a strong 2017, he said.
Persson adds that H & amp; M’s investments in China looks to quickly give positive impetus.
– the stores in China as we open, despite high price per square meter, and China’s economic development , very profitable with a short payback period.
H & amp; M’s sales during the quarter amounted to 54.341 billion kronor, compared to 53.233 billion kronor a year earlier.
New e-commerce stores
During the fiscal year expects H & amp; M to open 425 new stores and establish themselves in three new countries: Puerto Rico, new Zealand and Cyprus.
Next year planned expansion to 4-5 new countries, including Colombia.
Online betting also continues with nine new countries in the second quarter and plans for new e-commerce stores in Canada and South Korea in the fall.
Total expects H & amp; M with the end of the year to have e-commerce stores in 34 countries.