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MarketScreener Homepage  >  Equities  >  NASDAQ OMX STOCKHOLM  >  Hennes & Mauritz    HM B   SE0000106270

HENNES & MAURITZ

(HM B)
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H & M Hennes & Mauritz AB : H&M speeds up expansion as Q1 pretax falls

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03/21/2013 | 03:07am EDT
Logo of an H and M store pictured in Warsaw

STOCKHOLM (Reuters) - Hennes & Mauritz, (>> H & M Hennes & Mauritz AB) the world's second-biggest fashion retailer, will speed up store expansion in the face of weak European demand after unusually big markdowns pushed down profits more than expected in the first quarter.

STOCKHOLM (Reuters) - Hennes & Mauritz, (>> H & M Hennes & Mauritz AB) the world's second-biggest fashion retailer, will speed up store expansion in the face of weak European demand after unusually big markdowns pushed down profits more than expected in the first quarter.

The Swedish group, whose biggest rival is Zara owner Inditex, (>> Inditex SA) does the bulk of its business in Europe, where the region's debt crisis and rising unemployment have dampened consumer spending.

"The first quarter has been characterized by the continued challenging situation for the fashion retail industry in many of our markets mainly due to a continued tough macro-economic climate, but also due to unfavorable weather during parts of the quarter," Chief Executive Karl-Johan Persson said.

It said markdowns dragged down the gross margin in the December-February period to 55.2 percent from 55.8 percent a year earlier, below a 55.6 percent forecast in a Reuters poll of analysts.

Pretax profit was 3.23 billion crowns ($499.9 million), down from 3.70 billion and below a forecast 3.26 billion. H&M already earlier unveiled that sales stood at 28.4 billion crowns, up 2 percent.

"With the high level of stocks and tough current trading we will in the second quarter have a weak gross margin again," said Natixis analyst Jean-Baptiste Teissier.

The company on Thursday warned that March sales had been hit by cold weather in Europe and the United States, and said stocks were higher than expected at the end of the first quarter.

H&M has been making long-term investments in online shopping and new chains of stores, such as recently-launched "& Other Stories" to broaden its customer base, following Inditex which runs a string of other chains alongside Zara.

Barclays analyst Christodoulos Chaviarras said the report was a mixed bag.

"There is good reception of & Other Stories and an increased new store openings guidance ... it shows that H&M grows well in the longer term, and actually potentially has accelerated growth," he said.

"But on the other hand you have the warning on current trading given the unseasonal weather that is going to drag sentiment. So it seems like we're set for double-digit like-for-like (sales) declines in March."

H&M said it now planned to open around 350 new stores this fiscal year, compared with the 325 previously planned, and announced that it would enter Australia next year.

($1 = 6.4615 Swedish crowns)

(Reporting by Stockholm Newsroom)

Stocks treated in this article : H & M Hennes & Mauritz AB, Inditex SA
Stocks mentioned in the article
ChangeLast1st jan.
HENNES & MAURITZ -0.51% 206 Delayed Quote.64.30%
INDUSTRIA DE DISEÑO TEXTIL, S.A. 0.77% 28.75 End-of-day quote.28.64%
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Financials (SEK)
Sales 2019 233 B
EBIT 2019 16 805 M
Net income 2019 13 084 M
Debt 2019 12 073 M
Yield 2019 4,67%
P/E ratio 2019 26,1x
P/E ratio 2020 24,1x
EV / Sales2019 1,52x
EV / Sales2020 1,45x
Capitalization 343 B
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Technical analysis trends HENNES & MAURITZ
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Income Statement Evolution
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Mean consensus UNDERPERFORM
Number of Analysts 24
Average target price 165,22  SEK
Last Close Price 207,05  SEK
Spread / Highest target 13,5%
Spread / Average Target -20,2%
Spread / Lowest Target -63,8%
EPS Revisions
Managers
NameTitle
Karl-Johan Erling Göran Persson Chief Executive Officer
Stefan Persson Chairman
Helena Helmersson Chief Operating Officer
Jyrki Tervonen Chief Financial Officer
Joel Ankarberg Head-Information Technology
Sector and Competitors
1st jan.Capitalization (M$)
HENNES & MAURITZ64.30%34 988
INDUSTRIA DE DISEÑO TEXTIL, S.A.28.64%99 063
KERING17.12%66 672
FAST RETAILING CO., LTD.25.69%63 828
ROSS STORES34.92%40 606
ZALANDO88.50%11 634