Why did H&M move?
Written after the close on
H&M fell slightly over the last five trading days, a week in which it reported third-quarter results: profit rose on cost control and one-off tariff effects, but sales growth stayed soft and analysts split, with at least one broker turning negative. The stock drifted lower even as the wider Stockholm market was roughly flat, so the weakness looks at least partly company-specific — likely disappointment that the sales recovery is still slow and that freight costs and inventory are clouding the outlook. The final session was quiet, with H&M roughly unchanged while the market slipped a little. Watch the next report in late January for whether sales growth finally accelerates.
Earlier days
H&M fell despite a profit beat. H&M Hennes & Mauritz AB (publ) fell clearly over the last five trading days, a bigger drop than the slight decline in the OMX Stockholm 30, and it slipped again in the latest session, when the index fell sharply. The third-quarter report last week showed operating profit up 23% with a 10.6% operating margin, helped by one-off tariff effects and cost cuts, but sales in local currencies grew only 1% and the CEO said he had higher expectations, so the market focused on the soft top line, rising freight costs and high stock-in-trade. A sell recommendation from Pareto and analysts split over the report likely added pressure, while the Persson family's large share purchase and an executive's smaller buy gave some support. Next watch the late-January report for whether sales growth and inventory improve.
H&M fell sharply despite a solid report. Over the last five trading days H&M Hennes & Mauritz AB (publ) fell sharply, outpacing a clearly weaker Stockholm market, with the heaviest drop in the latest session while the index was roughly flat. The third-quarter report last week showed profit up sharply on margin gains and cost cuts, but soft sales growth, rising freight costs and heavy stock levels left analysts split, and one broker cut it to sell — a "sell" rating means the broker expects the shares to underperform. A senior executive's share purchase and the launch of a designer wedding collection drew attention but likely did little to offset the cautious sales outlook. What to watch next is the late-January report, where investors will look for sales growth to catch up with the improved margins.
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History in plain words, not investment advice.