The world's second-biggest fashion retailer Hennes & Mauritz on Monday reported a bigger rise than expected in May sales in local currencies.
Local-currency sales at the Swedish budget apparel firm, which has the bulk of its business in Europe, grew 10 percent in the last month of its fiscal second quarter, beating a forecast 8 percent in a Reuters poll of analysts.
H&M's single biggest market Germany saw overall apparel sales shrink 5 percent in the month, according to data from German monthly Textilwirtschaft data. H&M did not provide a country to country sales breakdown.
H&M's second-quarter sales were 45.9 billion crowns, up 21 percent from a year earlier, beating a forecast of 44.7 billion.
The company said crown weakness against most of its sales currencies had a substantial positive effect on reported sales. The fast-expanding firm said that including value-added tax (VAT) sales were up 10 percent in local currencies and up 20 percent in crowns.
Alandsbanken analyst Lars Soderfjall said the figures were a good sign ahead of H&M's full quarterly report on June 25.
"New concepts and online trade probably contribute increasingly to organic growth. The H&M share should outperform the market today," he said.
H&M shares were up 0.7 percent at 331.90 crowns by 0737 GMT, making them the best performer in the Stockholm bluechip index, which was down 0.9 percent.
Biggest rival Inditex last week reported a higher-than-expected profit for its fiscal quarter through April, helped by recovering consumer confidence in Europe.
H&M, which unlike Inditex sources most of its products in Asia in U.S. dollars, is expected to see higher sourcing costs in the quarter.
H&M' shares are up about 1 percent this year, substantially underperforming Spain's Inditex. Its stock is trading at 23 times 12-month forward earnings, a discount to Inditex which trades at 23 times forward earnings.
H&M said calendar effects pulled down May sales by around 3 percentage points, and quarterly sales by around 2 percentage points. (Reuters)
Source: www.businessworld.ie
