H&M shares slide as CEO exits, profit lags estimates

By Steve Goldstein

H&M Hennes & Mauritz stock fell as much as 10% on Wednesday after the Swedish retailer's CEO stepped down following worse-than-forecast results.

H&M (SE:HM.B) announced that Helena Helmersson is leaving after four years as CEO, to be replaced by Daniel Erver, a 42-year-old insider who has headed the core H&M unit. Karl-Johan Persson, H&M's chair, said she guided the company through a "very intense" time marked by the pandemic, geopolitical and macroeconomic challenges.

Analysts at Bernstein said the switch to Erver represents "more continuity than change" and questioned whether he would have the mandate to take radical steps to turn around the business.

H&M swung to a profit of 1.58 billion Swedish kronor ($150 million), on virtually flat sales of 62.65 billion kronor. The profit was well below the Visible Alpha-compiled consensus of 3.16 billion kronor, and sales also missed the consensus of 63.21 billion.

"For many consumers the year was marked by lower purchasing power because of high inflation and high interest rates," said Helmersson. H&M also has been hurt by its exit from Russia, and it said unusually hot weather in key Europe markets hit sales in the early part of the fourth quarter.

H&M kept a 10% operating margin target for 2024, as well as its goal of doubling sales by 2030.

Even with Wednesday's stock-market slide, the stock is still up 14% over the last 52 weeks, though rival Inditex (ES:ITX) has seen a 38% share-price rise over the same time period.

-Steve Goldstein

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

01-31-24 0850ET

Copyright (c) 2024 Dow Jones & Company, Inc.