H&M’s expectation beating second quarter sent shares 11% higher, reaching a 16-month high on Thursday.
The Swedish fashion retailer, which has lagged behind Zara-owner Inditex in recent times, reported profits of US$438.6mln in the second quarter to 31 May, ahead of forecasts of US$378.1mln.
Profits came in hot thanks to cost-cutting measures and its summer collection benefitting from warmer weather across Europe, it said.
Sales, which were up 9% in the first half, were boosted by pushing higher-priced brands that target customers less likely to be impacted by the cost-of-living crisis.
Sales from 1 June to 27 June increased by 10% compared to the same period last year, the group said.
“The summer collections have been well received and the third quarter has got off to a good start. The conditions for increased growth as well as profitability continue to develop in a favourable direction,” said CEO Helena Helmersson.