Fashion group H&M’s Q3 profit rises more than expected, warns of tariff costs

STOCKHOLM (Reuters) -Swedish fashion retailer H&M reported on Thursday a bigger-than-expected rise in third-quarter operating profit, but said it expected local-currency sales to be flat in September.

Operating profit in June through August was 4.91 billion crowns ($523 million) against a year-earlier 3.51 billion and a mean forecast in an LSEG poll of analysts of 3.68 billion, on local currency sales growth of 2%.

“The autumn collections have been well received,” it said in a statement.

H&M warned, however, that it expects the cost of U.S. tariffs on imports to have a bigger impact on gross margin in its fourth quarter which runs to end-November.

In the first two quarters of H&M’s fiscal year, profit fell.

($1 = 9.3940 Swedish crowns)

(Reporting by Greta Rosen Fondahn and Helen Reid, editing by Anna Ringstrom)