Clothing giant H&M has reported an increase in sales during the first half, as its efforts to reduce the level of discounted items paid off.
Sales increased by 11% to 108.49 billion Swedish Krona (£9.22 billion) in the six months to May 31, with net sales up 5% in local currencies.
But profits fell as the group invested in its new strategy, dipping just over 4% to 6.98 billion Krona (£593 million), after financial items.
The company expects the transformation efforts to gradually contribute to higher profitability, despite the initial dampening impact.
Chief executive Karl-Johan Persson said: “The H&M group continues to increase full-price sales, reduce markdowns and increase market share, showing that customers appreciate our collections and the improvements we are making to the product assortment and the customer experience.”
Sales have continued to rise in current trading with summer collections “off to a good start”, the group said.
Net sales in June were estimated to increase by 12%.
The cost of markdowns is forecast to reduce by 1.5 percentage points in the third quarter, completing a fourth successive quarter of reductions.
Further sales growth is expected to come from expansion to new stores, as the group rolls out both the core H&M brand and others such as & Other Stories, Monki and Arket.
Around 295 stores are scheduled to open in the current financial year, of which 220 are H&M stores.