H sees dollar strength adding to expenses after profit gains
dollar will weigh on costs this year, taking the shine from results showing the steepest gain in annual profit since 2007.
The shares fell as much as 2.8 percent, even as Europe second biggest clothing retailer reported that the new financial year gotten off to a good start. The greenback has increased 28 percent against H reporting currency, the Swedish kronor, in the past 12 months.
Net income for the 12 months through November rose 17 percent to 20 billion kronor ($2.4 billion), the Stockholm based company said in the statement. Profit for the fourth quarter rose to 6.22 billion kronor, compared with the average analyst estimate for 6.17 billion kronor.
H is expanding online while also Ray Ban Outlet broadening its offer with an extended range of shoes and sportswear as the company tries to fend off competition from Web rivals including Asos Plc and budget retailers such as Primark. The Swedish retailer in November sold a guest collection by designer Alexander Wang, Balenciaga creative director. in Stockholm, even after the retailer said it had sales in both December and January.
think is a logical range extension following sportswear and Ray Ban Outlet Online homewares, Richard Chamberlain, an analyst at RBC Capital Markets, said in a note.
Fourth quarter sales, excluding taxes, increased 17 percent to to 42.6 billion kronor, H said Dec. 15.
Inditex SA, Europe biggest clothing retailer, said last month that profit rose 0.8 percent in the nine months through October as mild fall weather damped sales.