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H&M: brighter outlook at capital markets day

(CercleFinance.com) - H&M expects full-year 2018 profit to be "somewhat better" than in 2017, while the year should remain "challenging," the Swedish clothing company said on Wednesday.

In a press release ahead of its capital markets day, H&M said sales at comparable stores are expected to fall again in 2018, with a gradual improvement over the year.

"A tough start with high opening stock levels from fourth quarter 2017 and imbalances in the product range are resulting in high markdown costs, with a negative effect on earnings at the start of the year," it warned.

But as the group's transition work and initiatives take effect, physical stores are expected to return to comparable positive sales development from 2019 onwards, the group said.

Also, H&M should benefit from considerably lower price markdowns, prompting the company to expect a "good increases in profit" over the medium term.

H&M shares are currently up 0.9% at 142.8 Swedish kronor after these comments.

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