April 16, 2012 / 7:25 AM / 7 years ago

UPDATE 1-Warm weather boosts H&M sales in March

* Same store sales up 16 pct vs forecast up 12.4 pct

* Biggest rise in monthly sales for five years

* Total sales up 26 percent

* April seen weaker on cold weather, calendar effects (Adds background)

STOCKHOLM, April 16 (Reuters) - Warm weather fuelled the biggest rise in monthly sales at Hennes & Mauritz for five years in March, although the world’s second-biggest fashion retailer signalled a weaker start to April as colder temperatures returned.

The Swedish budget clothing chain said on Monday sales at stores open over a year jumped 16 percent in local currencies last month, beating a forecast rise of 12.4 percent in a Reuters poll of analysts.

Total sales at the group, which competes with world number one Inditex, climbed 26 percent against a forecast increase of 22.7 percent.

“Sales in March were positively affected by, among other things, favorable weather and a positive calendar effect,” the company said in a statement.

“These factors will have a very negative effect in April.”

Nils Vinge, head of investor relations at H&M, said the first two weeks of April had been cold and would be compared with much more favourable weather in April last year.

In addition, the calendar effects mean fewer prime shopping days in April. Vinge said the calendar effects in April were more negative than the positive effect in March.

Sales this financial year, which for H&M starts in December, have shown a strong trend despite the debt crisis and austerity measures across much of Europe, the group’s biggest market.

However, the company is struggling with a strong Swedish crown, rising wages in manufacturing centres in Asia and higher transport costs, which have weighed on profits.

In December-February, the company managed to grow profits on a year-on-year basis for the first time in five quarters, but the results came in well below expectations.

The firm blamed plans for a new chain of stores and other investments to boost future growth for the profit miss.

H&M said late in March that total sales in the period up to March 27 had risen 22 percent compared to the same period a year earlier. (Editing by Mark Potter)

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