H&M and the Madonna Effect

Swedish fashion giant Hennes & Mauritz posted third-quarter pretax profit above consensus on Wednesday while its August sales also beat expectations, sending its shares up over 4.5 percent.

H&M said its gross and operating margins for the quarter were the best ever for the period from June to August.

The underwear-to-suits maker said in a statement the improvement in margins came “mainly due to a more efficient purchasing process that has led to lower buying prices.”

H&M, which brought in Madonna for its autumn fashion campaign, had pretax profit of 3.77 billion Swedish crowns ($516 million) in the third quarter. Chief executive Rolf Eriksen said a track-suit the star helped to design had been a top seller.

Eriksen said the Madonna deal had got massive media attention. “We have been very satisfied with sales of Madonna’s track-suit, it’s been the number one on our top-selling list for a couple of weeks,” he said.

Source: Reuters/Yahoo! News. Thanks to jlol.