H&M Group will expand into up to 10 new online markets next year, after the early success of its ecommerce push in Italy and Spain contributed to an 18%jump in sales during the first nine months of this financial year.
In the period ending August 31, group sales converted from local currencies were SEK 108.8 billion (£9.3bn), up from SEK 92 billion (£7.8bn) during the same period in 2013. Profit after tax increased from SEK 11.5 billion (£979m) to SEK 13.7 billion (£1.2bn).
The group said “well-received collections” had resulted in strong sales and increased market share in the third quarter (June 1 to August 31), while its online sales in Italy and Spain, into which the Swedish retailer launched in August, have got off to a “very good start”.
However, the retailer warned that its performance in the next reporting period could be affected by the unusually warm September weather in many of its markets.
The group’s sales in the third quarter rose to SEK 38.8 billion (£3.3bn) between June 1 and August 31, from SEK 32 billion (£2.7bn) last year. Gross profit increased 20% to SEK 22.6 billion (£1.9bn), with gross margin falling to 58.3% from 58.5% last year. Profit after tax grew 20% from SEK 4.4 billion (£375m) to SEK 5.3 billion (£451m).
Chief executive Karl-Johan Person said: “Within online shopping, we are in the midst of an exciting expansion. This year we have opened four big new H&M online markets [Italy, Spain, France and China] and next year we will open another eight to 10 new H&M online markets.
“We see our online store as a very important complement to our physical stores as the online store makes it possible for us to increase our level of service and availability to our customers.”
He did not say which online markets the group would target.
H&M is on track to expand its bricks and mortar portfolio by a total of 375 stores by the end of 2014. It will launch in the Philippines in October and will open in South Africa, Peru, Taiwan and Macau next year. Its launch into India, planned for this autumn, has been postponed until 2015.