1 Apr 2011

Quarterly profit down at fashion company

10:57 am on 1 April 2011

Profits at Swedish fashion retailer Hennes Mauritz fell by 30% in the first quarter of the year.

The company blamed higher cotton prices and the 'negative effect' of the strong Swedish krona.

HM said profits during December to February dropped to 2.62 billion kronor ($US417 million), from 3.54 billion kronor in the same period a year ago.

Shares in HM ended the day down 3.2% in Stockholm.

The budget fashion firm also reported broadly flat sales at 24.5 billion krona.

The BBC reports it was the third quarter in a row that the company has fallen short of its profit and sales forecasts.

HM was hit by higher cotton prices and increased transportation costs.

The price of cotton has risen more than 140% over the past six months, while the price of crude oil is more than 30% higher than it was 12 months ago.