STOCKHOLM (AP) -- Swedish retailer Hennes & Mauritz AB said Thursday that higher sales helped it post a modest rise in fourth quarter profits, offsetting the impact of shifting currency values and increased investments.
The budget fashion chain said net profit in the three months to the end of November was 5.61 billion Swedish kronor ($871 million), up 6 percent from the same period of 2012. The earnings were not as good as analysts were expecting, however, and H&M shares fell 3 percent to 278.6 kronor in early trading on the Stockholm stock exchange.
Fourth-quarter sales rose 11 percent to 22.19 billion kronor from 20.02 billion despite the higher cost of converting earnings made abroad back to kronor. H&M said the increased revenue in the fourth quarter helped it boost its market share and that sales developed particularly well in Asia, southern Europe and online.
Sales and administrative expenses rose 11 percent in the quarter due to increased investments in IT, online operations, broadening its product range and introducing new brands such as & Other Stories.
H&M's chief executive, Karl-Johan Persson, said he was happy with the result considering the big investments the company has been making and said & Other Stories received "a fantastic response."
"Our online sales continue to develop very well and hm.com, which is one of the world's most visited fashion websites, allows us to reach even more customers. In August we launched our online store in the U.S., with a very good response from customers," Persson said.
"The financial year 2014 has got off to a good start, with strong sales development in December and January. Although there are still macro-economic challenges in several of our markets, we are optimistic about 2014," he added.
H&M opened 356 new stores in the financial year ending November 2013, mostly in China and the U.S., and now has 3,132 stores around the world. In the coming year, it plans to add another 375 shops, including in the new markets Australia and the Philippines.
It will also start online sales in France and three other new markets.