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H&M's Q1 profit falls on forex rates

SWEDISH fashion chain Hennes & Mauritz AB yesterday said its first-quarter net profit fell by 12 percent due to foreign exchange rates and less consumer spending amid the global economic crisis.

Europe's second largest clothing retailer said net profit for the three months ended on February 28 fell to 2.6 billion kronor (US$321 million) from 2.9 billion in the same period a year earlier.

First-quarter sales, excluding value added tax, rose 18 percent to 23.3 billion kronor from 19.7 billion kronor a year ago.

The firm said the sales were "affected by a continued restrained consumption due to the current recession," but pointed out that online and catalog sales were positive.

H&M buys in US dollars and hedges 90 percent of the costs to protect itself against currency swings. It said the dollar's strength against the kronor had a negative effect on the balance 10 percent.


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