Down-at-heel

31 Jan 2017 By Carol Ryan

The Swedish fast-fashion chain is now targeting annual sales growth rather than how many new stores it opens. Its new goal of 10-15 percent growth is ambitious. With margins under pressure, an unexpected increase in pretax profit in the fourth quarter may be a passing fad.

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Fashion group Hennes & Mauritz on Jan. 31 dropped its decades-old store target goal in favour of a new annual target to increase group sales by 10 percent to 15 percent in local currencies. It said sales including VAT increased by 7 percent in local currencies in the full year to Nov. 30, 2016.

Pretax profit in H&M's fourth quarter increased to 7.4 billion Swedish crowns ($839 million), up 3.7 percent from the same period a year earlier. Analysts had expected a 2 percent fall to 7 billion according to a recent Reuters poll.

H&M said it will open approximately 430 net new stores in the current financial year.

H&M shares were up 5.6 percent by 0900 GMT.

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