Hennes & Mauritz, the Swedish fahion retailer known for its trendy yet affordable clothes, on Tuesday reported a 14 per cent rise in sales in July, just shy of some analyst expectations.

Analysts had expected Europe?s largest fashion retailer to report sales growth of 15 per cent.

The group said it had also added another 100 stores to its international portfolio over the past year. H&M operates in 19 countries and has nearly 1,000 shops.

In June the group said its US operations had moved into profit for the first time since it launched there in 2000.

Earlier this year H&M signalled it would be prepared to raise dividends to up to 50 per cent of profits if its cash generation continued to exceed that needed for its international expansion.

H&M said then that the existing policy of paying out a third of earnings per share was not flexible enough and meant the Swedish group had had to resort to special dividends for the past two years.

The group is also considering moving some key operations away from Stockholm, though not its headquarters.

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