Hemtex reports third-quarter operating profit of SEK 90 M

Hemtex’s interim report for the third quarter, November 2007 – January 2008 reveals continued strong growth in the gross profit margin, which rose to 55.5% (54.8), despite extra costs of SEK 22 M for the management of inventories. Net sales amounted to SEK 523.2 M (501.2), up 4% compared with the year-earlier period. Consolidated sales in comparable stores declined by 5%.

During the interim report period, May 2007 – January 2008, sales rose by a total of 12% to SEK 1,284.1 M (1,147.8). Operating profit amounted to SEK 174.3 M (202.7), down 14%, which yielded an operating margin of 13.6% (17.7).

”We noted a slackening of the home textiles market during the final quarter of the 2007 calendar year, which also affected Hemtex. However, we believe the customers’ positive reception of the first six Hemtex & More stores and our expanded product range are the tools we need to achieve continued growth. With a total of 205 stores at the end of February, the potential to increase sales is favorable,” says Hemtex President and CEO, Anders Jansson.

The Group opened a total of 19 new stores during the interim report period, of which eight were in Sweden, five in Finland, four in Norway, one in Denmark and one in Estonia. Hemtex expects to establish approximately 25 stores during the 2007/2008 fiscal year, including franchise stores. Two franchise stores were opened in Poland during the interim report period and Hemtex believes it has favorable potential to grow in new markets, both through its own stores and through franchise stores, as it is currently doing in Poland.