STOCKHOLM (dpa-AFX) - Swedish retailer Hennes & Mauritz AB or H&M (HNNMY.PK, HMRZF.PK, HEN.L) reported Thursday that its second-quarter profit after tax increased to 5.90 billion Swedish kronor from last year's 5.36 billion kronor. Earnings per share were 3.56 kronor, higher than 3.24 kronor a year ago. The profit increase in the second quarter was mostly due to continued expansion and tight cost control.
Profit after financial items increased 10 percent to 7.71 billion kronor.
Gross profit increased 9 percent to 29.35 billion kronor. This corresponds to a gross margin of 57.1 percent, down from 57.6 percent last year.
H&M group's sales including VAT grew 10 percent to 59.54 billion kronor from 54.34 billion kronor a year ago. Sales excluding VAT amounted to 51.38 billion kronor, higher than last year. In local currencies, sales increased 5 percent.
The company continued rapid and profitable growth in online sales, which in some established markets already account for 25 to 30 percent of total sales. The profitability of the online sales is in line with that of the physical stores, the company said.
Karl-Johan Persson, CEO, said, 'Sales in the UK, Scandinavia and Eastern Europe as well as in many of our growth markets were good. However, it was more challenging in several of our major markets such as the US, China, the Netherlands and Switzerland.'
Looking ahead, the company said its sales including VAT for June 2017 are expected to increase by 7 percent in local currencies compared to the same month last year.
Copyright RTT News/dpa-AFX