STOCKHOLM (AP) -- Swedish fashion retailer Hennes & Mauritz AB on Wednesday said profits fell by 11 percent in the second quarter due to the strong Swedish krona and increased markdowns as it tried to shift its products.
The company said its net profit for the March-May period dropped to 4.66 billion kronor ($720 million) from 5.22 billion a year earlier. Sales for the quarter slipped marginally to 31.64 billion kronor from 31.66 billion.
H&M CEO Karl-Johan Persson said the krona's strength weighed on the result, while sales in local currencies increased by 5 percent.
He said sales remained strong in Asia but that the overall revenue suffered due to the "continued challenging situation for the fashion retail industry" and bad weather in many of the company's big markets.
Persson added that H&M opened nearly 100 new stores in the second quarter, including its first in South America in Santiago de Chile, and continues to make long-term investments in its online sales.
"Although most of these long-term investments have not yet generated revenues, we see them as wise and necessary - all in order to build an even stronger H&M," Persson said. "There is great potential in the growing online market. We are looking forward to launching our online sales in the US in August."
H&M's share price was up some 1.2 percent at 227.5 kronor in early trading on the Stockholm Stock Exchange.
Founded in 1947, H&M has more than 2,900 stores in some 48 countries. In addition to H&M, the group includes the brands COS, Monki, Weekday and Cheap Monday, & Other Stories as well as H&M Home. It employs more than 100,000 people worldwide.