Company Reports

H&M released its third-quarter results today, reporting 1% local-currency sales growth and an operating margin of 9%, excluding one-offs. Full-year SG&A reduction guidance was narrowed to the lower end of the range amid rising cost pressure heading into the fourth quarter.

Hennes & Mauritz released its six-month results on June 25, 2026, with local sales down by 1% and an increase in operating margins of 70 basis points to 7.1%. Results came in below our expectations. Shares traded 4% down intraday.

Although we still believe that H&M (the world’s second-largest fashion company in terms of revenue) benefits from scale advantages and brand recognition, we think these are not sufficient to guarantee medium- to long-term economic profits in an increasingly competitive environment, hence our no-moat rating for the company.

H&M has released its first-quarter results for fiscal 2026, reporting a 1% decline in organic sales. However, gross and operating margins improved year over year. Results were below our estimates, largely due to adverse currency effects.

H&M reported full-year organic sales growth of 2%, with operating margin expanding by 0.7% year over year. While organic sales increased, reported results were adversely affected by unfavorable currency movements. Shares are trading 2% lower intraday.

Although we still believe that Hennes & Mauritz (the world’s second-largest fashion company in terms of revenue) benefits from scale advantages and brand recognition, we think these are not sufficient to guarantee medium- to long-term economic profits in an increasingly competitive environment, hence our no-moat rating for the company.

H&M shares rallied by 9% after the company reported strong improvement in profitability and decent sales trends in the third quarter.

Hennes & Mauritz delivered 1% local currency growth in the second quarter, or 3% excluding store closures, and operating margin was 150 basis points lower than the prior year. The market took the print positively, sending shares up 4%.

We are reducing our fair value estimate for H&M to SEK 158 from SEK 190 as we lower our expectations for midterm growth and profitability recovery. We see shares as fairly valued.

Although we still believe that Hennes & Mauritz, or H&M, (the world’s second-largest fashion company in terms of revenue) benefits from scale advantages and brand recognition, we think these are not sufficient to guarantee medium- to long-term economic profits in an increasingly competitive environment, hence our no-moat rating for the company.

No-moat H&M reported full-year results for fiscal 2024 (ending November 2024) with fourth-quarter sales rising by 3% and full-year sales up 1% in local currencies. Currency fluctuations hit annual sales by roughly 1%. Operating margin for the quarter and full year was at the same level of 7.4%, below our 8.5% expectation and still far below the company’s 10% target. However, the margin trajectory continued to improve from a low of 3.2% in 2022 and 6.9% in 2023. The market reacted negatively with shares dropping around 5% after the investor call on Jan. 30. We believe H&M is making the right strategic moves by optimizing its store network and focusing on womenswear and fashion collections. Its scale advantage over smaller peers allows it to quickly identify and adapt to fashion trends, accelerating new product releases in-store and online to meet demand. We maintain our fair value estimate of SEK 190 per share and see shares as undervalued.

We are maintaining our fair value estimate for no-moat H&M as the company reported flat revenue at constant exchange rates and operating margin came under pressure somewhat due to higher sales, general, and administrative expenses. Gross margin improved slightly.

We are maintaining our fair value estimate for no-moat H&M as the company reported solid improvement in profitability in the second quarter and first half of the year, even as sales remained subdued.

Although we still believe that Hennes & Mauritz, or H&M, (the world’s second-largest fashion company in terms of revenue) benefits from scale advantages and brand recognition, we think these are no longer sufficient to guarantee medium- to long-term economic profits in an increasingly competitive environment, hence our no-moat rating for the company.

We are maintaining our fair value estimate for no-moat Hennes & Mauritz as the company reported declining sales but stronger profitability in the first quarter. After rallying 13% intraday, shares look slightly undervalued.

No-moat Hennes & Mauritz reported stagnant sales growth in the fourth quarter of 2023 compared with the previous year. Notably, the gross margin and operating margin exhibited an encouraging uptick, reaching 53.7% and 6.9%, respectively, as opposed to the 49.8% and 1.3% figures recorded in the preceding year. Despite the improved profitability, shares are down 11% at the time of writing; we surmise investors are not happy with the announcement that Helena Helmersson is stepping down as CEO and being replaced by Daniel Ervér.

We are maintaining our fair value estimate of SEK 190 for no-moat Hennes & Mauritz as the company reported flat constant currency revenue but solid profit improvement in the first nine months of 2023. At current levels, shares look attractive.

We are maintaining our fair value estimate for no-moat H&M at SEK 190 per share after the company reported a rather challenged second quarter but with some signs of optimism. After an 18% rally during the day, shares look fairly valued.

Although we still believe that Hennes & Mauritz, or H&M, (the world’s second-largest fashion company in terms of revenue) benefits from scale advantages and brand recognition, we think these are no longer sufficient to guarantee medium- to long-term economic profits in an increasingly competitive environment, hence our no-moat rating for the company. Further, the company's responsive supply chain initiatives seem to no longer be working, as sales faltered and inventory days grew from about 117 in 2015 to 140 days in 2022, while fixed store costs are becoming an increasing drag on profitability as store traffic falls in mature markets.

We are maintaining our fair value estimate of SEK 179 per share for no-moat Hennes & Mauritz as the company reported first-quarter profits still under pressure by strong a U.S. dollar and freight costs. We expect those headwinds to annualize or unwind during the course of the year. Sales in local currencies were up 3% in the quarter but 7% if operations in Russia, Belarus, and Ukraine were to be excluded. The comparison base gets easier from March onward. Smaller brands enjoyed stronger growth, up 11% at constant currencies. Gross margin was down 210 basis points due to aforementioned headwinds of currencies and freight costs, with markdowns being flattish. Selling and administrative costs were contained, growing at 3%, in line with sales in local currencies. Further on the plus side, inventory turns improved, inventory being down 16% at constant currencies despite positive sales growth.