Fashion retailer H&M upbeat as June sales off to a good start

Hennes & Mauritz, the world’s second-biggest fashion retailer, said sales in June had gotten off to a good start after reporting second-quarter profits in line with analyst forecasts.

The Swedish budget fashion company, which competes with the world's biggest clothing retailer Zara-owner Inditex, said on Wednesday its spring collections had been well-received and cited strong sales for other H&M brands such as COS, & Other Stories and H&M Home.

It posted a pretax profit of 7.6 billion Swedish crowns ($1.1 billion) for the March through May period, matching a mean analyst forecast in a Reuters poll.

The group, which has been broadening its product offering and investing in its online business having gotten off to a slow start compared with some rivals, posted a gross margin in the quarter of 60.8 per cent - just below an analyst forecast for 61.2 per cent.

“We are seeing some of our long-term investments starting to generate revenues such as & Other Stories and our online store in the US and in France,” chief executive Karl-Johan Persson said in a statement, adding the company would continue to make long-term investments.

H&M, which reported quarterly sales last week, said June sales were off to a good start after a near 20 per cent increase in May. It did not provide further details about its June sales.

Last week, Inditex said its sales rose 11 per cent in local currencies between February 1st and June 8th, accelerating from the 8 per cent it recorded in the year to Jan. 31.

H&M said it would launch an extended shoe range this autumn. It plans to roll out in 8 to 10 online markets in 2015 after starting up sites in Spain, Italy and China this autumn.

Reuters