STOCKHOLM (dpa-AFX) - Shares of Hennes & Mauritz AB (HNNMY.PK, HMRZF.PK, HEN.L) were gaining around 6 percent in the morning trading after the Swedish retailer reported Tuesday significant earnings growth in its fourth quarter with strong sales. The company also projects higher sales in fiscal 2017.
For the fourth quarter, profit after tax increased to 5.91 billion Swedish kronor from 5.53 billion kronor last year. Earnings per share were 3.57 kronor per share, compared to 3.34 kronor, last year.
Profit after financial items increased to 7.41 billion kronor from 7.15 billion kronor last year. Gross profit increased from last year, while gross margin dropped to 57 percent from prior year's 57.5 percent.
H&M group's sales including value added tax or VAT increased 8 percent to 61.10 billion kronor from 56.48 billion kronor a year ago. Sales increased by 7 percent in local currencies.
Sales excluding VAT amounted to 52.72 billion kronor, compared to 48.69 billion kronor in the previous year.
The company noted that the difference between the sales increase in SEK and in local currencies is due to how the Swedish krona has developed against the overall basket of currencies in the group compared to the same period last year.
In the month of December, sales including VAT increased 6 percent, and sales in January till 29 increased by 11 percent, both in local currencies.
Further, the company said its Board of Directors proposed a dividend of 9.75 kronor per share for the 2015/2016 financial year. The dividend will be paid in two instalments during the year - in May and in November.
For fiscal 2017, H&M expects its sales to increase by 10 to 15 percent in local currencies per year with continued high profitability. The sales target includes both stores and online sales.
The company said its outlook was rephrased from previous target of increasing the number of stores by 10 to 15 percent per year.
H&M further said it plans to open approximately 430 new stores net in the 2016/2017 financial year. H&M group plans to launch one or two new brands in 2017.
In Sweden, H&M shares were trading at 250 kronor, up 5.57 percent.
Copyright RTT News/dpa-AFX