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Hennes & Mauritz Sales
Hennes & Mauritz Sales Gained 14% in July on Openings (Update4)
Aug. 17 (Bloomberg) -- Hennes & Mauritz AB, Europe's largest clothing retailer, said sales rose 14 percent in July as the company increased its total number of stores by 11 percent by expanding in markets such as the U.S. and Canada.
Revenue excluding currency movements decelerated from June's 15 percent gain, the Stockholm-based company said in a statement on Waymaker. Ten analysts surveyed by SME Direkt expected a 15 percent increase, their median estimate shows. Sales in stores open more than one year probably rose about 2 percent, according to Monika Elling, an analyst at Enskilda Securities.
``You're going to see better like-for-like sales in the full year,'' said Elling, who has a ``buy'' rating on the stock. The weather has been better for clothes retailers this year after last year's summer heat wave in Europe, and retailers are cutting prices less, she added.
Hennes and Spanish competitor Inditex SA are expanding in new markets to boost profit. The Swedish company is focusing on countries such as the U.S., Poland and the Czech Republic, where it sells clothes such as sleeveless women's tops for as little as 2.90 euros ($3.59). Hennes uses models such as Naomi Campbell in advertisements and has hired Karl Lagerfeld, known for his work with Chanel, to design a line of clothes for its fall collection.
Arteixo, Spain-based Inditex aims to expand more in Japan and western European nations such as Italy.
Canada, Ireland
Chief Executive Rolf Eriksen, 59, aims to increase Hennes' total number of outlets by 14 percent this fiscal year. The retailer opened its first stores in Canada in March, added an outlet in Norway in June, and is buying 10 stores from Gap Inc. to expand in Germany.
Hennes in 2003 entered Poland, Portugal, the Czech Republic and Italy. The company plans to enter Ireland next year, which would be its 21st market.
Shares of Hennes rose 1.5 kronor to 194 kronor at 10 a.m. in Stockholm. They have gained almost 10 percent in the past year as Inditex stock has slid 19 percent.
Hennes had 996 stores at the end of July, Carl-Henric Enhorning, director of investor relations, said in a telephone interview. He declined to comment on same-store sales.
The dollar has dropped about 9 percent against the krona in the past 12 months. Hennes has benefited because it buys more than half of its garments from Asia, where textiles usually are priced in dollars.
Tweed, Tartan
The retailer plans to improve the quality of its garments and add more dress wear to its fall-winter collection to gain more customers. The autumn collection is based on English styles including tweed, tartans, wool cardigans and lumber jackets, Hennes said.
Hennes also has been cutting prices in an effort to counteract lackluster demand in Germany, which accounts for a third of sales. The company trimmed prices by 5 percent in the second quarter. Chief Financial Officer Leif Persson said in May Hennes probably would cut prices by the same amount in the third quarter and possibly 1 or 2 percent after that.
Profit in the three months through May climbed 5.6 percent to 1.76 billion kronor ($236 million) as sales rose 7.5 percent, Hennes has said.
(Source: http://quote.bloomberg.com/apps/news?pid=10000085&sid=a5gS722zPkOs&refer=europe) |
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