Q2 operating profit 4.74 bln SEK vs forecast 4.07 bln
Local currency sales up 10 for June 127

STOCKHOLM, June 29 Reuters HM, the world39;s secondbiggest fashion retailer, reported stronger than expected MarchMay profits on Thursday and said thirdquarter sales were also off to a good start as the company strives to catch up with fastergrowing rivals.

Operating profit in the Swedish group39;s MarchMay fiscal second quarter was 4.74 billion Swedish crowns 438.55 million down from 4.98 billion a year earlier but ahead of a mean forecast of 4.07 billion in a Refinitiv poll of analysts.

HM, which has lagged Zara owner Inditex, has sought to raise its fashion appeal and boost its higherpriced brand Cos, targeting shoppers less vulnerable to the rising cost of living as fastfashion giant Shein takes market share with cheap clothes.

The summer collections have been well received and the third quarter has got off to a good start, Chief Executive Helena Helmersson said in a statement.

The conditions for increased growth as well as profitability continue to develop in a favourable direction, she added.

Localcurrency sales for June 127, the first month of HM39;s third quarter, rose by 10 compared with the corresponding period last year.

HM39;s operating profit margin in the second quarter was 8.2, down from 9.2 a year earlier, while the group reiterated its goal of a 10 margin next year, which analysts have said could be hard to reach.

The group last year announced layoffs…