H&M explained that its annual net profit dropped by 11 percent due to higher purchasing costs from the rising dollar.

The group, which opened 427 new stores during that year, said its profit fell to 18.636 billion kronor (1.972 billion euros, $2.109 billion) in its 2015/2016 financial year, ending on November 30.

The profit drop of nearly two billion kronor ($226 million) was also a result of “an increase in discounts” after a cold spring in Europe.

“For fashion retail in general, 2016 was at the same time a challenging year in which various external factors – including geopolitical events – had a negative impact on retail trade in many markets,” the company's CEO Karl-Johan Persson said in a statement.

“This was particularly visible in France, Germany, Switzerland and Italy as well as in the US and in China,” he added.

For the coming year, the group plans to open 430 new stores and settle in five new markets: Kazakhstan, Colombia, Iceland, Vietnam and Georgia.

Measured in local currencies, sales jumped by seven percent to 223 billion kronor ($25 billion) in 2015/2016.

For 2016/2017, H and M aims to raise its turnover from shops and online sales combined by 10 to 15 percent.

On the Stockholm Stock Exchange, the group's shares surged nearly five percent in early business, vastly outperforming the overall market which was up by 0.8 percent.

The apparel giant has 114,586 employees worldwide, including nearly 9,000 in Sweden.