STOCKHOLM, Sweden — Hennes & Mauritz AB, Europe’s second-largest clothing retailer, reported first-quarter profit that fell more than analysts anticipated as the company invested in expansion and sales fell short of its expectations.
Net income fell 10 percent to 2.46 billion kronor ($380 million) in the three months ended Feb. 28, the Stockholm-based company said in a statement today. That compares with the 2.57 billion-kronor average estimate of 17 analysts surveyed by Bloomberg.
“2013 will be a challenging and exciting year with continued strong expansion,” Chief Executive Officer Karl-Johan Persson said in the statement. The company will open 350 new stores, higher than a previous forecast of 325, and will enter Australia next year, he said.
H&M, the purveyor of 10-euro ($13) studded T-shirts, is trying to expand its customer base by adding shop formats after falling behind Spanish competitor Inditex SA. H&M is introducing the more upscale “& Other Stories” brand to 10 European markets. Inditex said March 13 profit increased at the slowest pace in five quarters, missing analysts’ estimates as a weak Spanish economy damped consumption in its home market.
First-quarter sales rose 2 percent to 28.39 billion kronor, excluding value-added tax, H&M said March 15. Revenue at stores open at least a year declined 3 percent during the period.
Editors: Celeste Perri, Marthe Fourcade