Expansion drives H&M profits - FT.com Shares in Hennes & Mauritz surged to a record high as the Swedish fashion retailer unveiled forecast-beating profits amid a big expansion drive. H&M reported operating profit in the third quarter of SKr5.8bn ($900m), up 16 per cent on a year earlier and ahead of analyst estimates of SKr5.5bn. Our expansion is strong. It is not long since we opened our 2,000th store in 2010, and this September - only three years later - we opened our store number 3,000, in Chengdu, one of China's major cities," said Karl-Johan Persson, chief executive. The Swedish purveyor of cheap chic has been overshadowed by Inditex - owner of Zara - since the Spanish group overtook it to become the world's largest fashion retailer two years ago. But Inditex last week reported flat profits in the first half while H&M is now starting to reap the rewards from the start of its much-delayed US online store. In early trading on Thursday morning, H&M's shares rose 7 per cent to SKr282.50. They have now risen by a third in the past three months as investors have bet that the recent pressure on profits would soon start to ease. In the three months to the end of August, H&M's closely watched gross margin rose from 58.2 per cent a year earlier to 58.8 per cent. The group has been expanding rapidly and this year opened its first stores in Chile, Estonia, Lithuania and Serbia. It is soon to start in Indonesia, while next year brings Australia - its second foray into the southern hemisphere. South Africa is planned for 2015. H&M lifted its target for new store openings this year from 325 to 350. The company has been more cautious in online shopping than many rivals, but its US launch in August - after repeated delays - is expected to herald a wave of similar launches around the world. The US online store had been "super successful," said Mr Persson. We have been planning for it for quite some time. It shows that we can be competititve in the online store in the most competitive market. We are expanding a lot. We see that the 10-15 per cent new growth target will be achievable for many years to come. The group has also started & Other Stories, a new womenswear brand, and is planning a new sports range early next year.