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Hennes & Mauritz AB Class B HM B

Rating as of

Morningstar’s Analysis

Valuation
Currency in SEK
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

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

Jelena Sokolova, CFA Senior Equity Analyst

Analyst Note

| Jelena Sokolova, CFA |

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.

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Company Profile

Business Description

Hennes & Mauritz is a global multibrand fashion conglomerate that was founded in 1947. Its flagship H&M brand accounts for most of revenue (90%), but the newer brands (COS, &Other Stories, Monki, Weekday, and newly launched Arket) are growing more quickly. H&M commands low-single-digit market share in a fragmented global apparel market. Just under 70% of revenue is generated in Europe and Africa, 15% in Asia and Oceania, and 16% in North and South America. The company operates over 5,000 stores globally (60% of those in Europe), of which 4,429 are H&M-brand stores.

Contact
Master Samuelsgatan 46A
Stockholm, SE-106 38, Sweden
T +46 87965500
Sector Consumer Cyclical
Industry Apparel Manufacturing
Most Recent Earnings May 31, 2021
Fiscal Year End Nov 30, 2021
Stock Type
Employees 153,000

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