STOCKHOLM (Reuters) -H&M, the world’s second-largest listed fashion retailer, beat first-quarter operating profit expectations on Wednesday helped by a smaller-than-expected fall in sales.

The Swedish group posted an operating profit of 2.08 billion crowns ($196 million), up from 725 million and well above the 1.43 billion expected by analysts in an LSEG poll.

Sales fell by 2%, better than analysts expected, while sales at the start of its second quarter rose by 2% in a sign of stronger demand for its clothing and accessories.

“The quarter’s sales gradually improved during February with well-received Spring collections, which is a positive sign that we are on the right track,” said CEO Daniel Erver, who has been in the role for two months.

The challenge for Erver will be to show that H&M can boost profit while returning sales to growth.

H&M has said it aims to reach a 10% operating profit margin over the course of this year.

The retailer, known for $19.99 jeans and dresses under $15, also sells leather trousers for more than $300 and, under its Cos brand, coats for as much as $1,190.

(Reporting by Marie Mannes in Stockholm and Helen Reid in London; editing by Louise Rasmussen and Jason Neely)

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