H&M posts stronger than expected March sales growth

Hennes & Mauritz, the world's second-biggest fashion retailer, on Wednesday reported a better than expected 10 percent jump in March sales, its sixth straight month of double-digit growth.

Analysts polled by Reuters had on average predicted a 7.5 percent sales increase in local currencies.

"An earlier Easter is a positive distortion, so we wouldn't read too much into it, although we would expect the shares to outperform today," Societe Generale analyst Anne Critchlow said.

The company said it had 3,580 stores at the end of March, up from 3,216 a year earlier, without providing further detail.

H&M plans to open 400 new stores this year, mostly in China and the United States, and roll out e-commerce in nine more markets.

But with sourcing costs likely to rise because most of H&M's purchases are made in U.S. dollars while much of its sales are in euros, analysts fear margins will be squeezed this year by the dollar's appreciation.

H&M shares were up 1.5 percent in early trade, against a 0.1 percent gain for the broader Stockholm share index.