Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  Equities  >  NASDAQ OMX STOCKHOLM  >  Hennes & Mauritz    HM B   SE0000106270

Delayed Quote. Delayed  - 10/20 05:29:52 pm
217.1 SEK   +1.35%
10/19 MACY : H&M to open store in Spotsylvania Towne Centre
10/13 HENNES & MAURIT : ARKET now open in Munich
10/03 HENNES & MAURIT : H&M Edition
SummaryQuotesChartsNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsSector newsTweets

Hennes & Mauritz : H&M Hit by Discounting, Slowness to Embrace Digital -- Update

share with twitter share with LinkedIn share with facebook
share via e-mail
0
09/28/2017 | 12:22pm CEST
By Dominic Chopping and Saabira Chaudhuri 

STOCKHOLM -- Shares in Hennes & Mauritz AB fell sharply Thursday after the fashion retailer said profit sank in the third quarter amid a heavy bout of price-cutting and fewer visitors to its stores.

The company said it initiated a period of "aggressive markdowns" over the summer after entering the third quarter with too much stock. H&M said that while the move helped shift inventory and clear the way for its new autumn range, sales slowed somewhat toward the end of September.

The downbeat results underscore the diverging fortunes of H&M and its main rival, Zara owner Inditex SA -- which reported upbeat earnings earlier this month -- as well as the cost of the Swedish company's sluggishness to embrace digital.

H&M has lagged behind competitors in the move to online sales and although its digitization process is now in full-swing, growing online sales didn't fully compensate for reduced footfall at stores in several established markets.

"The fashion retail sector is growing and is in a period of extensive and rapid change as a result of ongoing digitization," Chief Executive Karl-Johan Persson said.

"The competitive landscape is being redrawn, new players are coming in and customers' behavior and expectations are changing, with an ever greater share of sales taking place online."

For the third quarter, H&M reported a 20% fall in net profit to 3.84 billion Swedish kronor ($471.2 million), missing analysts' forecasts of 4.07 billion kronor. Sales, excluding value added tax, rose 4.5% to 51.23 billion kronor. Gross margin fell to 51.4% from 54.0%.

Shares in the company traded down about 6% in early trading.

Fast fashion retailers are feeling pressure amid the move to online sales, which has forced them to invest in delivery and logistics at a time when price competition is increasingly fierce.

H&M, Zara and Associated British Foods PLC-owned Primark are all fighting against one another as well as a slew of small online-only brands that pay little to advertise on Facebook and Instagram and sell directly to shoppers. Amazon has also increasingly been investing in its own fashion offering, putting further pressure on the industry's profit margins.

In response, H&M has moved to diversify away from its core mass-market H&M brand into more premium apparel. Last month it opened the first store for its new brand "Arket" on London's bustling Regent Street. It also has brands including Cos, Monki and Weekday, although these remain small revenue contributors making up an estimated 5% of group sales according to RBC.

Still, H&M says its online sales are growing at a rapid pace as it opens in new markets and invests in click and collect, next-day delivery and returns-to-store services. It has also worked to improve its supply chain and shorten lead times.

Online sales now account for as much as 25% to 30% of total sales in some markets and the company estimates group online sales will grow by at least 25% a year going forward.

The company's growth plans also involve opening more physical stores, although numbers have been reduced.

The group had 4,553 stores as of Aug. 31, a 10% increase from the 4,135 stores it had at the same time last year, and it plans to add a net 385 stores this year, compared its forecast of 400 stores at its second quarter earnings.

Write to Dominic Chopping at [email protected] and Saabira Chaudhuri at [email protected]

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on HENNES & MAURITZ
10/19 MACY : H&M to open store in Spotsylvania Towne Centre
10/13 HENNES & MAURITZ : ARKET now open in Munich
10/03 HENNES & MAURITZ : H&M Edition
09/29 HENNES & MAURITZ : Hundreds flock to H&M opening at mall
09/29DJHENNES & MAURITZ : H&M's Profit Falls as Retailer Discounts -- WSJ
09/28 HENNES & MAURITZ : H&M Kicks Off Climate Week In New York
09/28 European shares edge up and cling to 10-week high, H&M disappoints
09/28DJHENNES & MAURITZ : H&M Hit by Discounting, Slowness to Embrace Digital -- Update
09/28 H & M HENNES & MAURITZ AB : Nine-month report
09/20DJINDITEX : Zara Parent Company Inditex Sees 9% 1st Half Net Profit Rise on Year
More news
News from SeekingAlpha
10/08 Is This 12% Yielder A Once-In-A-Lifetime Opportunity?
10/02 Has H&M Already Reached The Bottom?
09/29 Hennes & Mauritz AB ADR 2017 Q2 - Results - Earnings Call Slides
09/29 Hennes & Mauritz's (HNNMY) CEO Karl-Johan Persson on Q3 2017 Results - Earnin..
09/28 Hennes & Mauritz reports Q3 results
Financials ( SEK)
Sales 2017 204 B
EBIT 2017 22 907 M
Net income 2017 17 826 M
Finance 2017 5 193 M
Yield 2017 4,56%
P/E ratio 2017 19,84
P/E ratio 2018 17,90
EV / Sales 2017 1,51x
EV / Sales 2018 1,42x
Capitalization 313 B
Chart HENNES & MAURITZ
Duration : Period :
Hennes & Mauritz Technical Analysis Chart | HM B | SE0000106270 | 4-Traders
Technical analysis trends HENNES & MAURITZ
Short TermMid-TermLong Term
TrendsNeutralNeutralBearish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 29
Average target price 210  SEK
Spread / Average Target -2,0%
EPS Revisions
Managers
NameTitle
Karl-Johan Persson Chief Executive Officer
Stefan Persson Chairman
Jyrki Tervonen Chief Financial Officer
Morten Halvorsen Head-Information Technology
Anders Gunnar Dahlvig Independent Director
Sector and Competitors
1st jan.Capitalization (M$)
HENNES & MAURITZ-15.15%38 549
LVMH MOËT HENNESSY VUITTON SE32.80%144 076
CHRISTIAN DIOR SE39.35%59 452
VF CORP21.97%25 613
THE SWATCH GROUP24.09%22 056
PVH CORP37.81%9 629