Europe’s second-biggest clothing retailer, Hennes & Mauritz (H&M) reported a 25 percent increase in second-quarter earnings in its six-month report card.
It is the retailer’s strongest quarterly profit growth in more than four years, boosted by online expansion in France and new stores, including the April grand opening of H&M’s Australian flagship in Melbourne.
The Swedish company’s net income reached 5.81 billion kronor ($870 million) during Q2, up from 4.66 billion kronor ($701 million) in the same period a year earlier, outpacing analysts expectations. June sales are said to “have so far got off to a good start.”
The company plans to end 2014 bigger and stronger with approximately 375 new stores in total, including posts in the Philippines and India for the first time.
Investments in e-commerce will ramp up, as well, as the retailer aims to catch up to its online competitors like Forever 21 and Asos.
According to the report, online sales in France, which were launched in March, got off to a positive start. H&M CEO Karl-Johan Persson added, “This autumn, for example, we will open our online store in Spain and Italy, and later on this year also in China, which will be very exciting.” In 2015 H&M plans to open eight to ten new online markets, which will be announced later this year.
Looking forward, H&M is hedging its bets on footwear as the next category to conquer. An extended shoe range for women, men, teenagers and children is scheduled to launch in early autumn 2014. Persson said the new concept is set to offer a variety of models in different H&M price categories. The range will launch in select H&M stores in nine countries and in the retailer’s online markets.
Additionally, Persson noted that the company is pleased with the performance of its H&M Sport range and intends to broaden the line further to gain market share within the sports segment.