Hennes & Mauritz Profit Capped by Strong Dollar

By Jens Hansegard

STOCKHOLM--Sweden's Hennes & Mauritz AB (HM-B.SK) said Thursday that the strong dollar had curbed profit in the third quarter, but repeated its plans to open 400 stores this year, with China and the U.S. as its main expansion markets.

H&M's online rollout continues and the company will launch online stores in Switzerland and Russia this year. It plans to open online stores in nine markets in 2016.

The company said it intends to open 240 new physical stores in the fourth quarter, including its first stores in India and South Africa.

The Stockholm-based retailer said net profit increased to 5.31 billion Swedish kronor ($630.8 million) in the three months to Aug. 31 from SEK5.30 billion a year earlier, broadly in line with analysts' forecasts of SEK5.33 billion.

Sales in the quarter, excluding value added tax, amounted to SEK46.02 billion, up from SEK38.81 billion last year.

The group's closely-watched gross margin slipped to 55.9% from 58.3%, mainly because of the stronger dollar. H&M sources most of its clothes in Asia where it pays in dollars.

Sales from Sept. 1 to Sept. 22 increased by 12% compared with last year.

-Write to Jens Hansegard at [e-mail]

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September 24, 2015 02:43 ET (06:43 GMT)

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