Shares of H&M leapt 13% in early deals on Wednesday, after the Swedish retailer significantly beat profit expectations for its fiscal first quarter.
Operating profit rose to 2.08 billion Swedish krona ($196 million), versus the 1.43 billion krona forecast in a LSEG poll of analysts. The company’s operating margin rose to 3.9% from 1.3%, as year-on-year sales fell.
“Development continued in the right direction in the first quarter with an improved gross margin and operating profit, lower inventory and strong cash flow,” said H&M Group CEO Daniel Ervér, who joined the company at the start of the year after the surprise resignation of Helena Helmersson.
H&M has announced a focus on profitability over sales, amid pressure from growing competition from Zara owner Inditex and Chinese fast fashion retailers, such as Shein.
This is a breaking news story and will be updated shortly.
Read the full article here
