H&M Profit Drop Beats Estimates As Margin Damage C

September 29, 2011, 7:57 AM EDT inShare E-mailPrint MORE FROM BUSINESSWEEK Volvo approximate BPs Svanberg as Chairman to Replace Schweitzer S&P Places 15 Euro Nations on Warning for Credit Downgrade Euro leadership financial Union Pact Leaves Next Step to ECB europiuman CEOs take control out Cash to Germany In Case of Euro Breakup EU Leaders escape Demands for Investor Write-Offs in Bailouts By Armorel Kenna (Updates with analysts comment in sixth paragraph, CEO quote in 11th.) Sept. 29 (Bloomberg) -- Hennes & Mauritz AB, Europes second-largest clothing retailer, reported a drop in third- quarter earnings that beat analysts estimates as the company contained the tint of high cotton wrongs and wages in Asia. Operating kale fell 17 per centum to 4.71 billion kronor ($700 million) in the terzetto months ended Aug. 31, Stockholm- based H&M verbalise right away in a statement. The come of 17 analyst estimates compiled by Bloomberg was 4.35 billion k ronor. The gross margin change to 58.6 per centum from 60.5 per centum a year earlier, beating the 57.8 percent average estimate. H&M shares rose to the highest in more than a month. In addition to a near doubling in the price of cotton last year, the retailer has also had to cope with high labor expenses in Asia, where it gets about 75 percent of its clothes. succeeding(a) earnings may benefit from a 54 percent decline in cotton prices since they surged to a record in March. Gross margin is a relief, Jan Meijer, an analyst at ING skillful Banking in Amsterdam, said in an e-mail. The market was worried that H&M margins would be impacted heavily by higher(prenominal) cotton prices and wages in Asia. H&M gained as much as 5.7 percent in Stockholm furrow and was up 9.2 kronor, or 4.7 percent, at 205 kronor as of 1 p.m. higher(prenominal) stock-take The third quarter could have been a lot worse from an input be perspective, given higher cotton cost still fil tering through to the company, Societe Gener! ale analyst Anne Critchlow said in an...If you compliments to get a full essay, order it on our website: OrderCustomPaper.com

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