Swedish retailer H&M has posted lower profits for the final quarter of the year, citing an increase in raw material prices, but improved its overall earnings for the year.
H&M posted profit of $1.1billion for the fourth quarter, a decrease of 10%. Sales during the quarter increased 15% in local currencies.
For the full-year, H&M’s sales again increased by 15% in local currencies. FY profit after financial items increased 13%.
The retailer added that sales in the period 1 – January 25, 2011 increased by 9% in local currencies compared to the same period last year.
It plans for a net addition of around 250 stores for the financial year 2010/2011.
Karl-Johan Persson, H&M CEO, said: “2010 was a very good year for H&M with a sales increase of 15%. Profit after financial items increased to SEK 25 billion. During the year we improved our market position further with a strengthened customer offering by giving the customers even more fashion and quality at the best price. The economy improved from 2009 but in several countries the economic situation was still uncertain and difficult.”
H&M said that raw material have increased during the period, with cotton prices almost doubling in 2010.
“Naturally, H&M has to adapt to changing conditions but always in a way that is in accordance with our business concept — to offer customers fashion and quality at the best price — and in that way increase the opportunities for us to continue to take market shares,” a statement added.