Leap year lifts H&M Feb sales

STOCKHOLM - Sales at Swedish budget fashion retailer Hennes & Mauritz grew for a third consecutive month at its established stores, rising by 2 percent in local currencies in February when there was an extra day due to 2012 being a Leap Year.

That beat a Reuters poll average forecast for a 1 percent drop, with estimates ranging from a fall of 5 percent to a rise of 2 percent.

"Sales in February were positively affected by approximately 3 percentage points due to the Leap day on Feb. 29 2012," H&M, which has the bulk of its sales in Europe, said.

H&M and rivals such as Zara owner Inditex, the world's largest fashion retailer, have in recent months had to slash prices to shift a buildup of stock caused by unusually mild weather and a squeeze on consumer spending.

The Swedish firm in January said markdowns would be large in the quarter and it was braced for tough times in many markets this year, as it posted a surprise fifth straight drop in quarterly profit for the September-November period.

Commenting on the February numbers, Sydbank analyst Nicolaj Jeppesen said: "It's a pleasant surprise. February sales are quite good compared with what was expected. H&M is going forward and gaining market share, in my belief, and things seem quite good.

"When we know that some 25 percent of H&M sales are from the German market, we must conclude that they really outperformed the German market this month."

Apparel sales in Germany, H&M's biggest single market, shrank 8 percent in February, according to industry publication Textilwirtschaft.

H&M's total sales in the last month of its financial first quarter, including stores open less than a year, rose 13 percent against an average forecast for an 8 percent rise with estimates ranging between a 3 percent drop and a 12 percent rise.

In the December-February period, turnover increased to 27.8 billion Swedish crowns from a year-ago 24.5 billion, matching a forecast for a 12 percent rise to 27.4 billion. (Reporting by Anna Ringstrom; Editing by Erica Billingham)