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H&M profits hit in fourth quarter

H&M has been forced to report lower than expected profits for the fourth quarter of 2015, which the fast fashion chain said were hit by mild weather and higher purchasing costs.

The Swedish retailer posted a pre-tax profit of SKr7.15bn (£577m) for the three months to November 30, 2015, lower than the SKr7.27bn (£586m) that had been expected.

H&M, which has 3,924 stores worldwide, said the strong dollar negatively affected its profits while unseasonably mild weather across Europe and North America in November meant sales edged up just 4%. Sales increased 10% in December before slowing again to 7% growth year-on-year in January.

H&M has also warned that heavy discounting in order to shift leftover winter stock would impact its first quarter profits.

However for the full year, pre-tax profit rose 5% to SKr 27.2bn (£2.22bn). Sales including VAT were up 11% in local currencies.

This year the business plans to open 425 new stores while expanding into three new markets, New Zealand, Cyprus and Puerto Rico.

It is not known how many are planned for the UK, however H&M announced this week it is upsizing its store at the Bluewater shopping centre in Kent, creating a 40,000 sq ft flagship for the southeast of England.

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