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H&M profit beats estimates as retailer unveils new store brand
[JOHANNESBURG] Hennes & Mauritz AB reported first-quarter earnings that beat analysts' estimates as the Swedish retailer's store openings helped offset higher purchasing costs.
H&M also said Thursday it would introduce a new store brand, Arket, with the first outlet opening in London this fall.
Pretax profit fell to 3.21 billion kronor (S$504.83 million), H&M said in a statement before European markets opened. Analysts predicted 3.03 billion kronor, according to the average of 12 estimates. The gross margin of 52.1 per cent also beat estimates of 51.4 per cent.
H&M warned in January that the strong US dollar and inflation would add to purchasing costs in the first quarter. The retailer gets about 80 per cent of its products from Asia, where clothing prices are often pegged to the greenback.
The new Arket label will also include online shopping, initially in 18 European markets, and will sell clothing and a limited range of items for the home at a premium to the company's main brand.