June 19 - H&M, the world's second-largest fashion retailer, reports a sharp rise in sales, offsetting the negative impact of a greater than expected drop in earnings in the second quarter. Hayley Platt reports.
14% is today's daily digit in Europe - the sales increase at H&M for the first two weeks of June. Shares at the world's second largest fashion retailer rose more than 2% on the news even though earnings dropped more than expected in the second quarter. They were hit by still-sluggish consumer morale and bad weather in the Swedish group's main European market. Pretax profit for the quarter fell below $950 million - down around 15% from a year ago. Large long-term investments and currency translation were partly to blame. Europe's debt crisis and rising unemployment have taken their toll on many of the region's fashion firms. And H&M is facing growing competition in its budget segment. Spring collections have also been left sitting on racks thanks to unusually chilly weather. Markdowns dragged H&M's gross margin in the quarter to just above 61 percent - down around half a percent.