The second-largest clothing retailer in Europe – Hennes & Mauritz AB made an official statement today, posting its biggest quarterly profit growth in a period larger than four years. The company said that its sales growth in the three months ended May 31st was benefited from its online expansion and new store formats.
Mr. Karl-Johan Persson, who is the current Chief Executive Officer of the company said in the statement, which was cited by the Wall Street Journal: “We have had a good second quarter with a strong increase in both sales and profits and increased market share.” Chief Executive Officer Persson also said: “This is a part of our long-term investments which also include investments in online, IT and our new brands.”
According to H & Ms statement, the companys net profit increased by 25% from 4.66 billion Swedish kronor for the same period last year to 5.81 billion Swedish kronor ($870 million). The result surpassed the median analysts expectations of 5.36 billion Swedish kronor. The company also revealed that its sales including value-added tax were 44.18 billion kronor, while its sales excluding VAT increased from 31.64 to 37.83 billion kronor.
H & M also explained that it plans to open online stores in eight to ten countries within 2015. This is part of the online expansion strategy followed by the company, which started in the U.S. in 2013, and proceeded with France in the spring of 2014. Online stores are also planned to be open in China, Spain and Italy in the autumn of 2014.
Europes second-largest clothing retailer, also announced that it plans to start selling an extended range of shoes for children, men and women as part of its strategy to increase its offering thanks to some new brands. The company shared that the new range of shoes will be offered in nine countries all over the world, including Sweden, China, the U.S. and and the U.K.
Hennes & Mauritz AB was adding 0.58% to trade at 293.40 Swedish kronor per share by 9:08 GMT, marking a one year change of 30.37%. According to the information published on the Financial Times, the 27 analysts offering 12-month price targets for H & M Hennes & Mauritz AB have a median target of 300.00, with a high estimate of 400.00 and a low estimate of 185.00. The median estimate represents a 2.85% increase from the last price of 291.70.
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