The world’s second-biggest clothing retailer said sales in local currencies rose by 16 per cent in July, compared with the same time last year, beating expectations.
Analysts on average had forecast a 12 per cent rise in sales. It was the 10th consecutive month of double-digit growth.
“Industry sales growth has been supportive and we think H&M is benefiting from its improved online offer, stronger seasonal sales and range extensions into areas like Home and Beauty,” RBC Capital Markets analyst Richard Chamberlain said. Shares in H&M have lagged behind its global peers amid concerns of further gross margin deterioration due to the strong dollar against the euro.
Chamberlain expects a decline of 160 basis points for this year and 100 for 2016.
However he added that lower Chinese supplier costs, including a weaker yuan, should give H&M more negotiating power with suppliers going forward.
The retailer had 3,649 stores at the end of July compared with 3,314 last year. It plans to open a net 400 stores by the end of the year and expand its new H&M Beauty range to 900 stores in 40 markets as well as online.