H&M reports weakest profit growth since 2003

Hennes & Mauritz (H&M) has reported its weakest profit growth since 2003. The retailer is blaming spiralling production and transportation costs for the dip.

H&M reports weakest profit growth since 2003

The Sweden-based clothes retailer, the second largest in Europe, made a third-quarter pre-tax profit of £380m. This figure is up from £360m for the same period last year but fell short of expectations.

Sales for the period totalled £1.7bn and the company gross margin fell by 0.4 percentage points from a year ago to 60.8%.

H&M says the fall in its gross margin is due to steeper price cuts compared with last year. The company adds it was hit by inflation in its production countries and higher transportation costs.

The retailer says it intends to continue expanding despite the gloomy market conditions and is aiming to open 114 new stores by the end of the year.

H&M opened its first store in Japan last month and is planning to open further outlets in Tokyo later this year and in 2009.

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