H&M profit jumps 21% in Q4

Stockholm, Sweden Swedish fast-fashion giant H&M on Thursday reported a 21% rise in fourth-quarter net profit, helped in part by new store openings. The chain said it plans to open 240 new stores this year in Europe, Asia and the United States.

The company said net profit in the three months to Nov. 30, its fiscal fourth quarter, increased to 6.2 billion kronor ($851 million) from 5.1 billion in the same period a year ago.

Sales rose 6.5% to 28 billion kronor ($3.84 billion) from 26.3 billion, and the gross margin was 66.3%, up from 62.4% in fourth quarter 2008.

The company said sales in local currencies increased by 3% and fell by 6% when excluding the impact of new store openings.

"The weak sales increase is mainly explained by continued recession with restrained consumption, a discount-driven market and mild weather during the autumn which had a negative effect on sales of weather dependent garments such as jackets and heavy knitwear," H&M said.

The company noted its rate of store expansion during the year was higher than originally planned, mainly because the economic downturn provided opportunities for new store projects. It had 1,988 stores at the end of November, up from 1,738 a year earlier.

Full-year net profit rose by 7% to 16.4 billion kronor ($2.3 billion) while full year sales climbed 15% to 101.4 billion kronor ($14 billion).