STOCKHOLM, Sweden – Earnings: H&M
Fashion retailer Hennes & Mauritz AB posted a 21 percent increase in fiscal first-quarter profit Wednesday on growing sales, but warned that cold weather would bite into revenue in March.
Net profit for the three months ending Feb. 28 rose to 1.81 billion kronor ($233 million), from 1.50 billion kronor in the same period last year. The earnings were boosted by lower tax payments in several markets, H&M said.
The Stockholm-based company said sales rose 20 percent to 15.1 billion kronor ($1.94 billion) from 12.6 billion kronor in the year-ago period.
In the U.S., an important growth market for the company, sales jumped 43 percent to 1.1 billion kronor ($141 million), representing 6 percent of the company's revenue.
H&M warned of a sales slump in March, especially in central Europe, because unusually cold weather kept consumers from renewing their spring wardrobes.
Shares in H&M fell 2.2 percent in Stockholm trading to 289 kronor ($37.30).
Mattias Karlkjell, an analyst with ABG Sundal Collier, told Dow Jones Newswires the results were in line with expectations and he expected the shares to stabilize.
H&M said it planned to open 54 stores during the second quarter, with the biggest expansions in the U.S., Germany, Spain, the Netherlands and Poland. Two stores will be closed during the quarter.
The company also said it plans to open its first store in Athens, Greece, in spring 2007. The company now has 1,196 stores worldwide.