May 15, 2014
H&M sales rise at fastest pace in five months in April
May 15, 2014
STOCKHOLM, Sweden - Swedish budget fashion retailer Hennes & Mauritz said on Thursday its total sales rose 17 percent in April, well above analyst expectations and growing at the fastest pace in five months.
Analysts had expected H&M, the world's second-biggest fashion retailer after Zara-owner Inditex, to post sales growth of 10 percent in the month after a 13 percent increase in March.
H&M, which no longer provides same-store sales figures, said it had a total of 3,246 stores at the end of April against 2,881 a year earlier, up 12.7 percent.
Both H&M and Inditex weathered the recent economic downturn in Europe better than many clothing firms thanks to their focus on fast-changing fashions at affordable prices.
But competition has picked up, with discount rivals such as Britain's Primark and U.S. group Forever 21 expanding across Europe and online firms such as ASOS grabbing market share.
That has made it harder for companies like H&M to pass on extra costs to customers and the Swedish firm saw its gross margin fall slightly in the first quarter which ended in February.
Following a harsh winter in parts of the United States, some analysts have been concerned the fashion firm could be forced to cut prices to deal with high stock levels.
The firm's share price is down 7.4 percent year-to-date.
H&M has also been cautious about the outlook for sales in Europe, saying the recovery still looked patchy.
H&M, with about half the number of stores as Inditex, is targeting Australia, the Philippines and India as new markets this year and plans to roll out online services in Spain, Italy and China.
It is also responding to competition by broadening its product offering and rolling out new mid-market brands such as COS and & Other Stories.
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