By Dominic Chopping
STOCKHOLM — Sweden’s Hennes & Mauritz AB on Wednesday launched a three billion Swedish kronor ($295.4 million) share buyback, and reported a higher-than-expected fiscal second-quarter net profit as earnings were boosted by well-received collections and lower markdowns.
The fashion retailer (OME:SE:HM.B) said sales in physical stores increased substantially in the quarter ended May 31 while online continued to do well, though sales in June are expected to decrease by 6% in local currencies on the year amid tough comparables. Paused sales in Russia, Belarus and Ukraine represent five percentage points of the June sales decrease, the company said.
Disruption and delays still exist in the supply chain but are gradually being eased, and at the same time there is substantial inflation, the company said.
H&M said it is looking at various options amid the war in Ukraine that give consideration to customers and colleagues, as well as the impact on the business as a whole.
“We are carrying out extensive work to prioritize initiatives, redistribute resources and ensure continued good profitability,” Chief Executive Helena Helmersson said.
The company posted a net profit of SEK3.68 billion for the quarter, compared with SEK2.77 billion a year earlier. Analysts polled by FactSet had expected SEK3.09 billion.
Sales rose 17% to SEK54.5 billion, as previously announced.
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