H&M earnings miss forecast, to add 400 stores in 2015
In this article (5)
Hennes & Mauritz, the world’s number two fashion retailer, missed quarterly earnings forecasts as it spent heavily on new ranges and websites in its battle with cut-price rivals, a drive it plans to extend in 2015 with a new beauty line.
H&M said on Wednesday pretax profit rose 7 percent to SEK7.80 billion (USD953 million) in the three months ended November, missing analysts’ average forecast of SEK7.96 billion as it booked a staff incentive payout.
The Swedish company is investing heavily in new concepts including sportswear and higher-price brands such as COS to try to protect margins over the long term as discount chains Primark and Forever 21 push prices down.
It aims to keep that up in 2015, planning to add 400 stores to its current 3,511, bring online sales to another nine markets and launch a new range of beauty products, as well as speeding up expansion of upmarket brands including COS.
Questions & Answers
Q.What was the main reason H&M's quarterly earnings missed forecasts?
What was the main reason H&M's quarterly earnings missed forecasts?
H&M missed forecasts because it invested heavily in new ranges and websites to compete with cut-price rivals. The company also booked a staff incentive payout during the three months ended November.
Q.How many new stores does H&M plan to open in 2015?
How many new stores does H&M plan to open in 2015?
H&M plans to add 400 stores to its current 3,511 locations during 2015. This expansion is part of its strategy to protect margins and compete with discount chains.
Q.What new product line is H&M launching in 2015?
What new product line is H&M launching in 2015?
H&M will launch a new range of beauty products in 2015. This initiative is part of a broader drive to extend its offerings and maintain competitiveness against other retailers.
Q.Which specific rivals are putting pressure on H&M's prices?
Which specific rivals are putting pressure on H&M's prices?
Discount chains Primark and Forever 21 are pushing prices down, which is a key factor influencing H&M's strategy. H&M is responding by investing in new concepts and higher-price brands like COS.
Reader pulse
Will H&M's expansion plans succeed?
16,145 votes so far