H&M Defies Bleak Conditions as Sales Rise
06/15/2012| 02:33am US/Eastern
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STOCKHOLM--Hennes & Mauritz AB (HM-B.SK), the world's No. 2 clothing retailer by sales, Friday reported a forecast-beating rise in second-quarter sales, defying the bleak conditions of its main markets.
Sales in the quarter ended May 31 rose to 31.66 billion Swedish kronor ($4.52 billion), from SEK27.63 billion a year earlier. According to a FactSet poll, analysts had expected total sales to amount to SEK31.41 billion.
H&M's sales from stores open at least a year rose 3.0% in May alone, beating consensus estimates of a 1.4% drop. Total sales in May, including sales from new stores, increased 12%, surpassing consensus estimates of a 7.8% increase.
H&M reports full second-quarter earnings on June 20.
The Swedish retailer had 2,575 stores at May 31, up from 2,297 stores a year earlier. Chief rival Inditex SA (>> Inditex SA), the market leader, had 5,618 stores as of April 30, after opening 464 in its first quarter.
H&M shares ended Thursday at SEK220.00, valuing the company at SEK364.12 billion.
On Wednesday, Inditex, the owner of fashion chain Zara, said sales in its first quarter increased 15% to 3.42 billion euros ($4.32 billion), boosted by new store openings and its continued expansion in emerging markets.
Other competitors are struggling to keep pace with H&M and Inditex. U.S. retailer Gap Inc. (GPS) last month posted unchanged first-quarter profit compared with a year earlier. And on Thursday, shares in troubled retailer Esprit Holding Ltd. (0330.HK) extended losses as the company's chairman resigned just a day after the surprise exit of its chief executive.
-By Jens Hansegard, Dow Jones Newswires; +46-8-5451-3095; jens.hansegard@dowjones.com
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