H&M's operating profit grows more than expected in third quarter
STOCKHOLM: Swedish fashion retailer H&M on Thursday reported a bigger than expected rise in June-August operating profit, as chief executive officer (CEO) Daniel Erver said his push to control costs and make sourcing more efficient was bearing fruit.
Swedish fashion retailer H&M announced on Thursday that its operating profit for the June-August quarter more than exceeded expectations. CEO Daniel Erver credited his efforts to control costs and improve sourcing efficiencies. Operating profit grew to 6.04 billion crowns (US$608.63 million), surpassing the previous year's 4.91 billion crowns and the average analyst forecast of 5.14 billion.
The company expects September sales to rise by one percent in local currencies. H&M's gross profit margin expanded to 54.0 percent, up from 52.9 percent last year, with one-off effects from tariffs contributing to the increase. Analysts had anticipated a margin of 53.4 percent. Erver noted that cost control, purchasing improvements, and operational efficiency enhancements led to the improved business performance.
While sales grew by one percent in local currencies during the quarter, he sees more room for growth in the future.
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