- H&M’s first-quarter operating profit was SEK 1.20 billion, lower than the estimated SEK 1.94 billion.
- Pretax profit stood at SEK 762 million, short of the SEK 1.51 billion estimate.
- First-quarter sales reached SEK 55.33 billion, a 3.1% increase year-on-year, but slightly below the expected SEK 55.84 billion.
- Nordics revenue decreased by 1.4% year-on-year to SEK 4.61 billion.
- Western Europe saw a revenue rise of 3.8% year-on-year, totaling SEK 17.96 billion.
- Eastern Europe’s revenue increased by 3.6% year-on-year to SEK 4.75 billion.
- Southern Europe recorded a 7% year-on-year growth in revenue, reaching SEK 7.36 billion.
- Americas revenue increased by 3.7% to SEK 13.20 billion.
- Asia, Oceania, and Africa experienced a revenue dip of 0.6% year-on-year to SEK 7.46 billion.
- The gross profit reached SEK 27.17 billion, below the estimate of SEK 28.24 billion.
- Gross margin was 49.1%, missing the 50.8% estimate, and the operating margin was 2.2%, below the expected 3.47%.
- Net income for the quarter was SEK 590 million.
- The number of new stores decreased by 40, compared to an estimated decrease of 33.06, resulting in a total of 4,213 stores, down 2.9% year-on-year.
- The company anticipates a 1% increase in group sales in March, measured in local currencies.
- Plans for 2025 include opening around 80 new stores and closing approximately 190 stores, mainly in established markets.
- Stock-in-trade increased by 9% compared to the previous year, assessed to be in good composition.
- The CEO noted that the quarter’s profitability was affected by a weaker gross margin due to negative external factors, increased markdowns, and investments in customer offerings.
- H&M expects the negative effects of external factors and markdown costs to reduce significantly in the second quarter.
- Analyst recommendations include 8 buys, 14 holds, and 10 sells.
A look at Hennes & Mauritz AB Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 2 | |
| Dividend | 5 | |
| Growth | 3 | |
| Resilience | 2 | |
| Momentum | 3 | |
| OVERALL SMART SCORE | 3.0 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
Based on the Smartkarma Smart Scores, Hennes & Mauritz AB (H&M) seems to have a positive long-term outlook. The company scores highest in Dividend and Growth, indicating a strong potential for returns and stable dividend payments. Although Value and Resilience scores are moderate, the company’s Momentum score suggests a steady upward trajectory in the future. With a focus on designing and retailing a wide range of fashionable clothing and accessories for various demographics, including women, men, teens, and children, H&M is well-positioned to capitalize on evolving consumer trends.
H&M’s emphasis on trendy, sporty, and classic garments, along with accessories like jewelry, bags, scarves, and cosmetics, reflects its versatility in meeting diverse customer preferences. Operating stores across Europe and the United States, H&M has a broad market presence that can support continued growth and resilience. Overall, the Smartkarma Smart Scores indicate a promising outlook for Hennes & Mauritz AB, highlighting strengths in dividend stability, growth potential, and momentum for future success in the competitive fashion retail industry.
Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
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