H&M upbeat for 2014 after quarterly profit undershoots

The Swedish budget fashion retailer posted a pre-tax profit of 7.3 billion Swedish crowns ($1.13 billion), missing average analyst forecasts for 7.6 billion. The gross margin also disappointed, slipping to 60.8 percent from 61.6 percent.

H&M, which had already reported quarterly sales, said it expected sales to rise 15 percent in January in local currencies after they rose 10 percent in December, the first month of its fiscal first quarter.

"Although there are still macro-economic challenges in several of our markets, we are optimistic about 2014 which will be an exciting year with new countries and new opportunities," Chief Executive Karl-Johan Persson said in a statement.

H&M, harder hit by the European downturn than its bigger rival Zara-owner Inditex which has more stores in emerging markets, said it expected to open 375 stores in 2014, including entering new markets Australia and the Philippines. ($1 = 6.4650 Swedish crowns)

(Reporting by Mia Shanley and Emma Thomasson)