Hennes & Mauritz AB says second-quarter net profit fell 17 percent as the Swedish fashion retailer continued to be hit by a strong U.S. dollar causing high costs.

The group's sales increased 2 percent in the quarter to 54.3 billion kronor ($6.6 billion) while profit dropped to 5.3 billion kronor from 6.4 billion a year earlier, with increased markdowns and investments.

CEO Karl-Johan Persson described the first half of the year as "challenging" but said Wednesday he expects future growth for the Stockholm-based company that has 4,000 stores in 62 markets, with plans to open more than 400 more this year.

In the online sector, H&M opened nine new markets this year increasing the total to 32, with two more launches later this year — in Canada and South Korea.