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H&M profit drops in Q4, still on track to open 275 stores

STOCKHOLM, Sweden — Swedish fast-fashion retailer Hennes & Mauritz reported Thursday that net profit for the fourth quarter dipped to $997.2 million from $1.1 billion in the year earlier period. Sales in December, the first month of H&M's fiscal first quarter, were up 13% year-on-year in local currencies, against a forecast 12%. Same-store sales were up 4%.

“H&M stands strong in a challenging market. We increased sales by 8 percent in local currencies and continued to gain market share during what was one of the toughest years for a long time for the fashion retail industry in many countries. The fact that we have gained market share, proves that our customers appreciate our collections, which offer a wide range of inspiring fashion for everyone," said CEO Karl-Johan Persson

Despite the surprise drop in Q4 profit, H&M said it would press ahead with its expansion, opening 275 new stores in its 2011/12 financial year, including its first in a Latin American market, Mexico. The chain operates about 2,500 stores in 43 countries.

"The new year has started well, with strong sales development in both December and so far in January. Most indicators suggest that the macro-economic climate in many of our markets will continue to be tough during 2012, but we have a strong belief in our offering and are convinced that H&M will continue to maintain its strong position as the year goes on. We are looking forward to an exciting year full of opportunities," said Persson.