Business news: H&M shares rise after surge in early summer sales

Business news: H&M shares rise after surge in early summer sales
That word doesn't mean what you think it means. Photo: Robert Henriksson/SvD/TT
Swedish fashion giant H&M looks on track for a budding recovery after a boost in quarterly results sent shares soaring.

About an hour into trading on the Stockholm stock exchange they stood 9.4 percent higher at 158.84 kronor.

H&M, which has been lagging in a relentless competition with Spanish rival Zara, earlier reported a net profit of 4.5 billion kronor ($485 million) between March and May, the second quarter of its financial year.

The net result was little changed from year-earlier levels, and slightly short of analysts' forecasts, but a brighter outlook still had investors rushing to buy into the stock.

“The H&M group continues to increase full-price sales, reduce markdowns and increase market share, showing that customers appreciate our collections and the improvements we are making to the product assortment and the customer experience,” said CEO Karl-Johan Persson in a statement.

Sales meanwhile rose by 11 percent with analysts welcoming the Swedish group's apparent success in accelerating its digital performance, especially in online sales which rose 20 percent in local currencies in the quarter, and 27 percent once converted into kronor.

“H&M is continuing to execute better this year and is gaining share in major markets, albeit against easy comparisons,” analysts at the Royal Bank of Canada said in a note to investors.

H&M's net margin rose to 7.8 percent from 1.6 percent in the previous quarter, a significant recovery but still far behind Zara, whose margin came in at 12.4 percent for its latest quarter.

Fashion vocabulary

fashion – mode 

end (-of-season) sale – slutrea 

clothes – kläder

trousers – byxor

sweater/jumper – tröja

We're aiming to help our readers improve their Swedish. This article includes a special edition of Swedish words associated with fashion. Did you find it useful? Do you have any suggestions? Let us know.

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