Jan 29, 2009
H&M Q4 pretax tops consensus but Dec sales lag
Jan 29, 2009
* Q4 pretax $891 mln, tops consensus forecast
* Dec sales lag consensus, says sees 9 pct rise in Jan
* Says expansion outlook good, plans 225 new stores
(Adds detail, background)
STOCKHOLM, Jan 29 (Reuters) - Swedish fashion giant H&M (HMb.ST) reported a bigger rise than expected in fourth-quarter pretax profits on Thursday but sales in December lagged forecasts.
The company said the outlook for future expansion was positive and said it planned to open 225 new stores in the new financial year, which runs from Dec 1. to Nov 30.
Pretax profits were 7.11 billion Swedish crowns ($891 million), compared with a mean forecast of 6.78 billion in a Reuters poll and a year-earlier 6.22 billion.
H&M and Spain-based rival Inditex (ITX.MC) have weathered a recent deterioration in consumer spending better than some rivals thanks to their focus on price-conscious fashion, but they are also feeling the squeeze.
"Most of H&M's sales markets were affected by a more restrained consumption due to the difficult global economic situation," the firm said.
"Despite somewhat lower sales than planned during the fourth quarter, the level of stock-in-trade was satisfying by the end of the quarter," it said.
Net sales in December rose 3 percent, well below a forecast 9 percent rise. In stores open a year or more, December sales fell 7 percent versus a forecast 3 percent drop.
H&M said it expected sales in January to rise 8 percent.
It said sales in its first two H&M stores in Tokyo surpassed expectations and were its most successful store openings ever. It said it was planning to open its first store in Bejing during spring 2009.
Last year shares in H&M, Sweden's biggest company by market capitalisation, fell 22 percent versus a 44 percent drop in the DJ European retail index .SXRP.
H&M proposed a 2007/2008 dividend of 15.50 crowns per share.
In the fourth quarter, sales rose to 30.8 billion crowns from 26.8 billion versus a forecast 26.0 billion. (Reporting by Anna Ringstrom; Editing by Jon Loades-Carter)
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