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STOCKHOLM, Sweden — Hennes & Mauritz AB reported fourth-quarter earnings that missed analysts' estimates as the clothing retailer's margins suffered from the strength of the dollar.
Pretax profit fell 8.4 percent to 7.15 billion kronor ($839 million) in the three months through November, the Stockholm-based company said in a statement Thursday. Analysts predicted 7.27 billion kronor, according to the average of 15 estimates compiled by Bloomberg.
"The strong U.S. dollar exchange rate has made our purchasing much more expensive," Chief Executive Officer Karl- Johan Persson said in the statement. "Our growth target of increasing the number of stores by 10 to 15 percent per year with continued high profitability remains intact."
H&M is expanding online while broadening its offer with an extended range of shoes and sportswear as the company seeks to fend of competition from Web rivals including Asos Plc. Gross margin in the fourth quarter narrowed to 57.5 percent, hurt by the dollar’s strength, which boosted purchasing costs. Unseasonably mild weather in countries including Germany, where H&M gets about a fifth of sales, also contributed to the weaker profit performance.
By Janice Kew; editors: Matthew Boyle, Thomas Mulier, Paul Jarvis.