STOCKHOLM Swedish fashion giant Hennes & Mauritz (H&M) (HMb.ST) saw sales at its established stores rise sharply in July from a year earlier as the company reaped the benefit of an improving global economy and gained market share.
The Swedish retailer, the world's third biggest by turnover, said sales at stores open more than a year were up 10 percent, topping the most bullish forecast in a Reuters poll.
Total sales in the month, which include newly opened stores, were up 21 percent, also much better than the most optimistic analyst had expected.
The average forecast in a Reuters poll of analysts was for a 1.7 percent rise in like-for-like sales, with total sales up 11.7 percent.
H&M gave no detailed comment.
Analysts, nevertheless, were impressed.
Soren Lontoft Hansen, analyst at Sydbank said sales in the month were positively affected by improved consumer sentiment, hot weather and relatively easy comparison figures from last year as well as appealing fashions which were helping H&M in key markets such as Germany and Sweden.
"I definitely think H&M are gaining market share in these important markets," he said.
U.S. rival GAP Inc. (GPS.N) posted a 1 percent rise in same-store sales in July and a 3 percent increase in overall sales.
The fashion chain, known for its sharp designs and low prices, had a slow spring season while the global economy remained rocky, but summer has been better.
"Fantastic sales, a heap better than expected," said one analyst who declined to be identified.
Shares in H&M were up 3.51 percent at 236.10 krona by 9:38 a.m. against a 0.23 percent fall in the blue-chip Stockholm index .OMXS30 and a 0.07 percent rise in European retail stocks .SXRP.
The strong figures come against a backdrop of tentative recovery in some of H&M's main markets.
In Germany, H&M's largest market, apparel sales inched up 1 percent in July from a year earlier, according to industry journal Textilwirtschaft. In its third-biggest market, Sweden, the HUI/Stil index for clothing sales were up 1.1 percent.
In June, the clothing chain's same-store sales were up 9 percent while total sales jumped 20 percent.
That month, H&M posted in-line second-quarter profits, but said a strengthening dollar and higher costs could hurt its gross margin in the months to come.
H&M does not release absolute sales figures, only the percentage change in local currencies.
(Reporting by Simon Johnson and Rebecca Roos; Editing by Sharon Lindores)