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H&M's net profits disappoint
By Louise Nordstrom |
September 30, 2010, Thursday
|
Print Edition
Print Edition
SWEDISH fashion retailer Hennes & Mauritz AB yesterday posted a near 23 percent rise in third-quarter net profit, saying investments into its collections boosted revenues.
Analysts, though, were disappointed by the extent to which price discounting hurt margins and by an unexpected slowdown in new store openings. Shares fell around 6 percent to 243.30 kronor (US$35.62) in early Stockholm trading.
The company made a net profit of 4.2 billion kronor, up from 3.5 billion kronor in the same three months in 2009. Revenues in the June-August period jumped to 31.5 billion kronor from 27.6 billion kronor in the third quarter last year.
"It is the company's view that the investment has contributed to the strong sales increase," the Stockholm-headquartered group said in the statement.
However, it added that due to delays in the completion of some shopping malls, it won't get access to some 20 planned new locations in the second half.
Albert Haeggstrom, head of Swedish equity at asset management firm Alfred Berg, said that although the company's markdown sales might have helped bump up revenue figures, it also pulled down the gross margin, to 60.5 percent from 61.6 percent.
In the fourth quarter, H&M said it plans to open some 140 stores and close 10. This compares with the opening of 159 stores in the same period last year, and the closing of 11.
Analysts, though, were disappointed by the extent to which price discounting hurt margins and by an unexpected slowdown in new store openings. Shares fell around 6 percent to 243.30 kronor (US$35.62) in early Stockholm trading.
The company made a net profit of 4.2 billion kronor, up from 3.5 billion kronor in the same three months in 2009. Revenues in the June-August period jumped to 31.5 billion kronor from 27.6 billion kronor in the third quarter last year.
"It is the company's view that the investment has contributed to the strong sales increase," the Stockholm-headquartered group said in the statement.
However, it added that due to delays in the completion of some shopping malls, it won't get access to some 20 planned new locations in the second half.
Albert Haeggstrom, head of Swedish equity at asset management firm Alfred Berg, said that although the company's markdown sales might have helped bump up revenue figures, it also pulled down the gross margin, to 60.5 percent from 61.6 percent.
In the fourth quarter, H&M said it plans to open some 140 stores and close 10. This compares with the opening of 159 stores in the same period last year, and the closing of 11.
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