H&M: shares jump on positive outlook

(CercleFinance.com) - H&M shares are jumping 10% on Thursday morning, after the Swedish fashion retailer, hit by competition from online rivals, reassured investors with a positive outlook.


The group's profit after tax came in at 4.6 billion kronor in the quarter ended 31 May, broadly unchanged compared to the 4.6 billion kronor in the same period a year ago.

Net sales increased by 11% to 57.5 billion kronor in the second quarter, with sales in local currencies up 6%, the group said.

Gross margin - a key measure of cost control - reached 55.4%, from 56.1% one year ago.

Analysts said that secnd-quarter results were "in line with consensus," but pointed out a "better outlook".

"Second-quarter is in line but current trading and third-quarter markdown comments are better than expected," UBS said in a note.

Indeed, H&M's CEO, Karl-Johan Persson, struck a positive tone in the group's statement.

"The H&M group continues to increase full-price sales, reduce markdowns and increase market share," he said.

The shares were up 10% at 159.5 kronor on Thursday, the sharpest riser on Stockholm's OMXS30 index.

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