H&M Q4 Profit Growth Exceeded Expectations

The world's second largest clothing retailer, Hennes&Mauritz AB (HMb.ST), today announced the fourth quarter of fiscal year 2014, after tax profits surpass market expectations. The group announced plans to accelerate the expansion of China and the United States in the current 2015 fiscal year, and will also expand its product line.

In the four quarter ended November 30, 2014,

AB achieved a profit of 6 billion 222 million Swedish kronor (US $760 million) after tax, up 12.1% from 5 billion 549 million kronor in the 2013 fiscal year, exceeding the 6 billion 170 million Krona expected by the market.

However, the pre tax profit of SEK 7 billion 799 million rose 7.4% compared to the same period, but still less than the market forecast of SEK 7 billion 960 million.

The dividend paid by the group of 9.75 Krona is also lower than the SEK 10.10 expected by the market.

On Wednesday, Hennes&Mauritz AB fell below Tuesday's market price of SEK 343.10.

Sales in the period covered by VAT increased by 11% according to the fixed exchange rate, excluding sales of VAT by SEK 42 billion 644 million, SEK, an increase of 16.8% over the previous year's 36 billion 495 million kronor.

Gross profit increased by 16.2% to SEK 25 billion 774 million annually, but gross margin decreased by 40 basis points to 60.4%.

The total profit after tax increased by 17%, from 17 billion 93 million kronor to 19 billion 976 million kronor.

Sales including VAT increased by 14% according to fixed exchange rate.

The sale of SEK was 151 billion 419 million Swedish krona, an increase of 17.8% over the 128 billion 562 million kronor in 2013 fiscal year.

Gross margins shrink by 30 basis points to 58.8%.

Chief executive officer of Hennes&Mauritz AB

The series that represents all its brands is popular, and the expansion of online and offline groups also promotes market share.

The group is expected to continue its strong momentum in January. Sales will grow by 14%, better than 11.7% expected in the market and 15% in the same period in 2014.

Hennes&Mauritz AB has added 379 stores throughout the year, with 3511 stores in 55 markets as of the end of November 2014.

This year, there are 400 stores, mainly in China and the United States, and will visit India, Taiwan, Macao, South Africa and Peru.

Online stores will also enter 9 new markets, including many Eastern European countries.

The flagship brand H&M plans to launch a cosmetics and body and hair care series called H&M Beauty in the fall.

The group also warned that a stronger US dollar could push the cost of procurement this year.

At the time of the deadline, Hennes&Mauritz AB fell 1.98% to SEK 331.90.