* Q3 pretax 5.8 bln SEK vs consensus 5.5 bln
* Gross margin 58.8 pct vs consensus 57.9 pct
* Smaller than usual negative effect from markdowns
* Sept. 1-24 sales up 8 pct
* Shares jump more than 6 percent
(Adds details, background, shares)
By Anna Ringstrom
STOCKHOLM, Sept 26 Swedish fashion retailer
Hennes & Mauritz looked to put a poor run of form
behind it on Thursday as it posted forecast-beating results for
its fiscal third quarter, helped by strong demand for its summer
collections and cost control.
H&M, the world's second-largest fashion retailer which has
most of its stores in Europe, has suffered more in a faltering
global economy than bigger rival Zara-owner Inditex,
which sells more clothes in emerging markets. Performance
earlier in the year was hit by a chilly spring in Europe.
H&M posted its first quarterly rise in gross profit margin
in more than three years to 58.8 percent from 58.2 percent a
year earlier, beating a Reuters poll forecast for 57.9 percent.
Pretax profits also beat expectations. Inditex reported a drop
in first-half gross margin to 58.6 percent last week.
"H&M has really turned a corner here," said Societe Generale
analyst Anne Critchlow. "It's the first time for quite a while
that we have seen a nice increase in profit. It's a big reversal
both for the profit and gross margin trends."
H&M shares, which had already risen 25 percent in the past
three months on hopes margin pressure has finally eased after an
improvement in like-for-like sales in the third quarter, jumped
6.6 percent by 0740 GMT to a new all-time high.
Inditex shares, which trade at 25 times expected 2013
earnings compared with 23 for H&M, rose 0.2 percent. Inditex
last week posted a pick up in sales, helping to ease concerns
its rapid growth of recent years may be faltering.
Chief Executive Karl-Johan Persson said H&M's summer
collections had sold well, particularly in Asia but also in
European markets like Germany, France and Italy, with fewer
clothes sold at a markdown compared with the second quarter.
In China, where H&M is opening new stores at a rapid pace,
quarter sales spiked 37 percent in local currencies, while they
were up 46 percent in Japan and 48 percent in South Korea.
STORE NUMBER 3,000
H&M, which opened store number 3,000 in Chengdu earlier this
month, reiterated its goal of increasing the number of stores by
10-15 percent per year, with about 350 stores planned for the
full-year 2013, most in China and the United States.
H&M said sales in the first 24 days of September, the first
month of its fiscal fourth quarter, were up 8 percent
year-on-year in local currencies.
Even as it expands, H&M said cost control remained good,
with costs in comparable stores down on the year.
It said its online store in the United States, launched on
Aug. 1 after several delays, had got off to a good start.
H&M has been making long-term investments in online shopping
and new chains of stores to broaden its customer base, following
Inditex which runs a string of other store formats alongside
Zara and has overtaken H&M online in recent years.
H&M, which now has e-commerce in nine countries, has said it
aims to roll out online in several countries per year from next
year on. It reiterated on Thursday it planned to go live in more
markets in 2014, but gave no details of which countries.
H&M, which has faced increased competition in its budget
segment from players like Britain's Primark, said its new
premium clothes and accessories brand "& Other Stories",
launched in March, had got a "fantastic reception," with the
next store planned in Berlin soon.
Pretax profit stood at 5.83 billion Swedish crowns [$907
million) against a year-ago 4.90 billion and a mean forecast for
5.53 billion. H&M had already unveiled an 11 percent rise in
($1 = 6.4305 Swedish crowns)
(Writing by Emma Thomasson, Additional reporting by Helena
Soderpalm; Editing by Niklas Pollard and Mark Poter)