Hennes & Mauritz, the world's second-largest fashion retailer, said sales grew for a third straight month in July, despite gloom in its biggest market Germany, in a sign of robust demand for budget clothes from austerity-hit shoppers.
The fast-expanding Swedish budget fashion group today said sales at stores open a year or more rose 2 per cent in local currencies in July, compared with a forecast for 2.7 per cent.
Total sales, including newly opened stores, were up 11 per cent, against a forecast for 12.4 per cent.
H&M, which trails Zara owner Inditex by most measures, has weathered the downturn relatively well as shoppers focus on cheap fashion.
H&M, present in 44 countries and expanding in emerging markets, has the bulk of its business in Europe.
In Germany, clothing sales overall shrank for a fourth straight month in July, declining 3 percent, according to industry publication Textilwirtschaft.
"In light of market data ... this shows H&M is doing relatively well," Nordea analyst Stefan Stjernholm said.
"Looking at H&M this year, we know it is a really tough market. Given that, I think H&M has delivered a good sales development overall."
H&M shares were down 0.2 per cent this morning, with a European retail index down 0.4 per cent.
Sydbank analyst Nicolaj Jeppesen said Europe may well have dragged on sales in July, with the increase coming on the back of growth in North America.
"Consumer confidence and the general market sentiment (in Europe) is quite weak and we expect that to continue. So, we need to see that they can increase sales in North America and improve their position in Asia," he said.
July is the second month of H&M's fiscal third quarter. In June, like-for-like sales were up 3 per cent, and total sales 13 per cent ahead.
In the first half of the year, like-for-like sales were up 3 per cent, and total sales 12 per cent.
H&M said it had a total 2,603 stores at the end of July, matching its target of growing its number of stores by 10-15 per cent annually.
Reuters
