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The retail chain's new chief executive, Karl-Johan Persson, said H&M, which is based in Sweden, is seeing more opportunities to expand around the world, including in the U.S. and Japan, as other retailers hit worse by the slowdown are forced to give up attractive store locations.

STOCKHOLM -- Hennes & Mauritz AB on Thursday posted a 4.1% rise in fiscal third-quarter net profit and expanded its goal for opening stores, but reported disappointing August sales.

The retail chain's new chief executive, Karl-Johan Persson, said H&M, which is based in Sweden, is seeing more opportunities to expand around the world, including in the U.S. and Japan, as other retailers hit worse by the slowdown are forced to give up attractive store locations.

The fast-fashion company, which has weathered the slowdown better than most retailers, raised its goal for the number of new stores it will open this year to 240 from 225. It had 1,840 stores in 27 countries on Aug. 31.

Mr. Persson said H&M will focus most of its near-term expansion on the U.S., U.K., Germany, France, Spain, China and Japan.

"New, interesting city locations keep coming up in the downturn," said Mr. Persson, the 34-year-old grandson of the company's founder and son of its majority owner. "We're financially strong, so we can take advantage of these opportunities," he added. "We feel that we can hit the gas pedal."

H&M, the world's third-largest fashion chain by revenue behind U.S.-based Gap Inc. and Spain's Inditex SA, reported net profit of 3.46 billion Swedish kronor ($505.2 million) for the three months ended Aug. 31, up from 3.33 billion kronor a year earlier. Revenue increased 13% to 23.55 billion kronor.

But total sales in August fell 3% from a year earlier, and August sales from stores open longer than a year fell 11%. Analysts had forecast total sales would rise 3.8% and same-store sales would fall 6.1%.

"In retrospect, it can be concluded that H&M was too cautious when planning its purchasing volumes of summer garments," the retailer said. "This had a negative impact on sales, particularly in August."

In Germany -- H&M's top market, where it generates about a quarter of its sales -- clothing sales overall fell 5% in August, according to industry journal Textilwirtschaft. In Sweden, also a big market for the company, apparel sales during the month fell 5.4%, according to the Swedish Retail Institute.

The U.S., where H&M has 175 stores, "continues to be a very tough market," Mr. Persson said. "There's tough price competition and fewer shopping bags out on the street. But we still see a lot of long-term potential in the U.S."

Mr. Persson added that H&M's U.S. plans include opening two stores in Orlando, Fla., this fall.

Credit: By Ola Kinnander