Sep 25, 2014
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H&M third quarter profit matches forecast

Sep 25, 2014

STOCKHOLM, Sweden - Hennes & Mauritz, the world's second-biggest fashion retailer, reported quarterly profits in line with analysts forecast on Thursday but said sales growth had slowed so far in September as unusually warm weather delayed purchases of autumn collections.

The Swedish firm said sales in the period Sept. 1-23 rose 7 percent compared with a near 20 percent increase in August, putting September on track to be the slowest month for sales growth this year.

In the prior six months running from March through August, sales growth averaged 16 percent.

H&M's shares were down 3.1 percent at 303.90 Swedish crowns by 0721 GMT despite the company reporting pre-tax profits up 20 percent at 7 billion crowns (597.82 million pounds) in its June-August fiscal third quarter, in line with analysts' forecasts.

"We have continued to gain market share thanks to strong sales development for all our brands. We see this as proof of well-received collections," Chief Executive Karl-Johan Persson said in a statement.

The firm plans to open 375 new stores net in total this year but said it will delay its launch in India until 2015, having previously planned a start this autumn, without explaining why.

The Philippines will become a new market for the group next month and it will open shops in South Africa, Peru, Taiwan and Macau in 2015.

H&M also said online sites in Italy and Spain launched in August, as well as in China in September, had got off to a very good start and said again that it plans to open in eight to 10 new online markets next year.

"We see our online store as a very important complement to our physical stores as the online store makes it possible for us to increase our level of service and availability to our customers," Persson said.

H&M, which was slower than many of its peers to start selling online, now has an online presence in 13 markets, about half that of its main rival, Zara-owner Inditex.

H&M's shares were down 3.1 percent at 303.90 Swedish crowns by 0721 GMT.

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