H&M outperforms forecasts

CLOTHING chain Hennes & Mauritz stoked hopes for a 2010 turnaround yesterday with a sharp rise in December and January sales, while store expansion helped it beat fourth-quarter profit forecasts.

The company – better known by its initials, H&M – faces stiff competition from global rivals such as Gap and Inditex. However, it has weathered the downturn better than many rivals thanks to its geographic spread and low-price profile. After undershooting sales forecasts for the last three months of its financial year, which runs November, H&M turned a corner in December with a 3 per cent rise in same-store sales.

That was the first positive result for same-store sales since April 2009, and the strong momentum appeared to carry over to January when sales increased by 13 per cent compared year on year.

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H&M also outperformed with a fourth-quarter gross margin of 66.3 per cent.