H&M defies gloom with 3% rise in June sales

Stockholm: Hennes & Mauritz, the world's second-largest clothing retailer, grew annual sales at established stores in June, in a sign of robust demand for budget clothing from austerity-hit shoppers.

The Swedish budget fashion firm said on Monday sales growth at stores open a year or more was steady in the month — the first of its fiscal third quarter — at 3 per cent in local currencies.

That, however, undershot a Reuters poll forecast for a 5 per cent rise.

Total sales were up 13 per cent from a year earlier compared with a mean forecast for a 14 per cent increase.

"The company delivers good figures despite the global worries. They are clearly taking market shares," said Nordea analyst Stefan Stjernholm.

Fast-expanding H&M, which does the bulk of its business in Europe and trails Zara owner Inditex by market value and turnover, said the number of stores in its 44 markets amounted to 2,596 at the end of the month.

In Germany, H&M's single biggest market by far, the overall clothing market was down 2 per cent, according to industry data.

In May and in the fiscal first half of the year, H&M's like-for-like sales were up 3 per cent, and total sales 12 per cent.

In the second quarter, H&M grew profits more than expected helped by its low-price focus, easing input prices and broadening geographic spread.

Inditex, too, defied the economic gloom in its second quarter, proving it can sell to both fashion-hungry shoppers in emerging Asia and cash-strapped consumers in Europe.