H&M Net Profit Falls 18 Percent in Q2

Swedish apparel retailer H&M’s (Stockholm) net profit fell 18 percent in the second quarter due to increased input costs including the rise in cotton prices, transportation prices and Asian wages.

For the three months ended May 31, net income fell to $917 million, from $960 million during the same period in fiscal 2010. Sales differed from month to month, with April boosted by the Easter weekend and warmer weather.

“We continue to gain market share in a very challenging market, which proves H&M’s strong position,” said ceo Karl-Johan Persson in a conference call.

Consumer spending had been impacted by rising interest rates, higher energy prices and austerity measures in many economies, Persson also noted.

H&M recently opened its first stores in Romania and Croatia and plans to add about 250 stores by the end of 2011, with China, the U.K. and the United States expected to be the largest expansion markets. H&M plans to open its first unit in Singapore this fall.

Including franchise operations, H&M has about 2300 stores in 40 markets.