// H&M’s profits beat analyst expectations as sales in the third quarter start strong
// The group’s operating profit margin in the second quarter was 8.2%, down from 9.2% a year earlier
H&M has reported stronger-than-expected profits and said its third-quarter sales were off to a good start as the retailer looks to catch-up with fashion titan Inditex.
The group‘s operating profit in its second quarter was £348m down from £365m last year but ahead of analyst forecasts.
It reiterated its goal of a 10% margin next year, which analysts have said could be hard to reach.
The profit margin was supported by easing input costs from improved macroeconomic conditions as well as from positive effects from a cost cutting program.
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Last year the group announced layoffs and other cost cutting measures that it said at the time would help it save costs from the second half of 2023 onwards.
Chief executive Helena Helmersson said: “H&M increased sales in many markets despite a squeeze on consumers’ spending ability and “unfavourable” weather,” adding that its summer collection had got off to a good start as temperatures rose across northern Europe.
“The conditions for increased growth as well as profitability continue to develop in a favourable direction.”
Shares in the world’s second-biggest fashion retailer were up 7% following the positive results.
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