Hennes & Mauritz Sales Recover From Pandemic in Q2, FVE Maintained

We are maintaining our fair value estimate of SEK 168 for no-moat Hennes & Mauritz as the company reported first half results largely in line with our annual expectations. Sales were up 12% in the first half in local currencies (only 3.5% in SEK with strong currency headwind) and improved 75% in the second quarter (at constant currencies) on an easy comparison base--the second quarter was the most affected by global store closures in 2020. In June, sales were up 25% at constant exchange rates versus 2020 levels, with most stores open. Online continued strong growth in the quarter, increasing by 40% in local currencies.