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STOCKHOLM (Reuters) – H&M, the world’s second-largest listed fashion retailer, reported a better-than-expected first-quarter operating profit on Wednesday, as sales showed signs of recovery with spring collections.
On the Stockholm Stock Exchange, the Swedish group’s shares jumped 13.10% at 09:17 GMT.
The group’s operating profit amounted to 2.08 billion crowns (181.36 million euros) in the first quarter, compared to 725 million crowns a year earlier, and well above the average forecast analysts who expected 1.43 billion crowns.
The 2% drop in sales in the first quarter was lower than expected, while at the start of the second quarter (March 1-25) sales were up 2% as demand recovered.
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“Quarterly sales gradually improved in February thanks to well-received spring collections,” said new chief executive Daniel Erver, who took office two months ago.
“Our top priority is to strengthen sales,” he added.
Daniel Erver also reaffirmed H&M’s goal of achieving an operating margin of 10% this year.
In a bid to improve the in-store experience, H&M announced renovations to around 250 stores this year, a “significant increase” compared to last year.
The group plans to open around 100 stores, mainly in growing markets, and close 160 in more established markets.
(Reporting Marie Mannes in Stockholm and Helen Reid in London; French version Lina Golovnya, editing by Zhifan Liu and Kate Entringer)
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