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Research Tree provides access to ongoing research coverage, media content and regulatory news on HENNES & MAURITZ AB-B SHS. We currently have 5 research reports from 1 professional analysts.
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HENNES & MAURITZ AB-B SHS
HENNES & MAURITZ AB-B SHS
The best is coming
31 Jan 17
Sales in Q4 edged up 8.3% to reach SEK52,720m. Full-year sales were up 6.3% (+7% in local currencies) to SEK192,267m. A marked slump was experienced in Germany, France and Spain which posted almost flat sales in local currencies (0%, -1% and +1% respectively). An impressive sales growth was reported in Scandinavian countries, Russia (+38%), Turkey (+41%), Canada (+15%), and in newer footprints. In Q4, gross profit increased by 7.2% to SEK30,027m, i.e. a gross margin of 57% compared to 57.5% a year earlier. The operating margin dwindled by 60bp to 13.9%, generating an operating profit of SEK7,354m (+3.8%). Net profit for the three months was up 7% to SEK5,914m. For the full-year, the gross margin lost 180bp to 55.2%. The slight increase in the quarter’s profitability partially mitigated the full-year profit retreat. The full-year operating profit dropped 11.6% to SEK23,823m. The operating margin stepped back by 250bp to 12.4%. Net profit dropped by 10.8% to SEK18,636m. Inventories surged by 26% yoy (in local currencies) to reach SEK31,732m. Gross cash shrank by 27% at SEK9,446m. Early FY2017 has sent positive growth signs with sales edging up 6% and 11% in local currencies respectively in December and January. The company has stepped up its growth target to 10-15% in local currencies per year starting from 2017 with much more effort on profitability. H&M operates in 35 online markets and 4,351 shops in 64 markets. The proposed dividend remained unchanged at SEK9.75, which will be paid in two instalments for the first time.
FY 16 margins under pressure
30 Sep 16
In the first nine months, sales growth was decent but margins were under external and internal pressures. Sales were up 5.6% to reach SEK139,547m, boosted by a rise of 6.4% in Q3 (SEK48.982m) compared to 5.1% in H1 16. Excluding Germany and Switzerland, which posted respective sales decreases of 1% and 9%, all regions experienced favourable momentum at local currencies led by the USA and Sweden (+7%). Following the weakening of the British pound, the performance in the UK turned negative (-5%) while, at local currency, revenue grew by 2%. Profitability was hit by the surging purchasing costs following the appreciation of the US$ as well as the heavy mark-downs applied in the current unusually warm weather. Moreover, operating investments incurred in the expansion plan are pulling margins down. The operating margin slipped to 11.8% (-3.2pc), dwindling the operating profit by 17% to SEK16,469m. Q3 operating profit was down 9% to SEK6,247m, i.e. an operating margin of 12.8%. Net profit amounted to SEK12,722m (-17.2%) since the beginning of the year. The slowdown is likely to continue in Q4 due to the warm September in which sales are expected to increase by 1% in local currencies. Capex surged by 75.7% to SEK9,378m. The operating cash flow remained almost flat at SEK17,549m. Stock in trade ballooned by 25.7% compared to year-end 2015 to reach SEK31,231m, i.e. 22.4% of sales. The financial position remains strong even with slipping cash to SEK8,68m. The group is currently operating through 4,135 stores and 35 on-line markets.
22 Jun 16
The challenging trading conditions are weighing on the fast fashion sector. H&M reported a modest 5.1% sales growth in 1H16 to SEK90.6bn. The gross margin retreated by 250bps to 54.9% leading to a gross profit of SEK49.68bn. Operating profit dropped from SEK13bn in 1H15 to SEK10.2bn in 1H16, i.e. a 21.3% decline. The operating margin fell to 11.3% vs. 15.1 in 1H16. The net profit amounted to SEK7.9bn versus SEK10.06bn a year earlier. 2Q16 posted a poor performance of 2.2% pulled down by unfavourable sales momentum in March. The quarter’s operating profit amounted to SEK6.95bn vs. SEK8.35bn in 2Q15. Most markets experienced a tough trading backdrop led by Switzerland which posted a 10% sales fall. Germany, the main market accounting for 17.2% of FY15 sales, reported a slight decrease of 0.3%. Favourable momentum was noted in the USA with a performance of 9%. Stock in trade ballooned by 29% to SEK25.3bn, i.e. 50 days of sales rolling out twelve months. The expansion plan continued in the 1H with 153 net new openings, bringing the total stores to 4,077 as of May 2016, of which only 171 franchises. 1H16 Capex amounted to SEK5.6bn versus SEK4.7bn a year earlier. The 3Q16 also looks challenging as sales including VAT in the 1-21 June 2016 period increased by 7% in local currencies.
The warm weather caught the Q1 performance in a whirlwind
06 Apr 16
The warm weather has put the Q1 performance under pressure. Sales growth slowed to 9% (in local currencies) yoy compared to 15% in Q1 15 and 11% in FY15 due to the markdowns on large stocks of winter garments. Sales amounted to SEK43.7bn vs. SEK40.3bn a year earlier. Aside from the price deflation, the mild weather caused a slump in demand for winter collections and pulled down sales. The heavy discounts coupled with the higher purchasing costs crumbled margins and deteriorated the operational performance. The gross margin lost 320bp to 52% dropping the operating profit by 29.5% to SEK3.3bn. Net profit decreased from SEK3.6bn to SEK2.6bn. The geographical breakdown reported an outperformance in the American and Italian markets which increased by 11% in local currencies. The main market (Germany), contributing 17% to revenues, disappointed with almost flat sales (+1%). The stock in trade jumped by 25% yoy to SEK25.2bn, amounting to 13.6% of sales on a rolling twelve months. The expansion plan is maintained both through stores and online and the full-year 2016 is expected to add 425 new stores to the current 3,970. Only 46 net additions were reported in Q1. Capex amounted to SEK2.5bn vs. SEK2.2bn in Q1 15. H&M is currently present in 61 markets and the expansion would consolidate these current markets with a focus on China and the USA. The online services are provided in 23 markets and are expected to be extended to 34 by the end of the year.
FY2015, the best results ever
28 Jan 16
The top line impressed with 19.4% full year sales growth to SEK180,861m. In local currency, the growth was limited to 11%. A very strong expansion was reported during the year with a total net addition of 413 new stores and ten new online markets. As of November 2015, H&M had 23 online markets and the number of stores was 3,924 in 61 markets. The company invested mainly in China and USA with 83 and 59 respective new stores in 2015. The gross margin lost 180bps to 57% pulling down the operating margin to 14.9%, versus 16.9% a year earlier. The net profit improved by 4.6%, from SEK19,976m in 2014 to SEK20,898m in 2015. Given the significant expansion, more than 16,000 new jobs were created in the H&M group in 2015.
20 Feb 17
Hayward Tyler Group* (HAYT): Trading update and financial position (CORP) | Petra Diamonds (PDL): Interim results (BUY) | Gemfields* (GEM): Interim results (CORP) | Premaitha Health* (NIPT): Middle East momentum (CORP) | Sound Energy (SOU): Acquisition update and TE-8 well spud (HOLD) | Proactis* (PHD): Interim trading on track (CORP) | 7digital* (7DIG): Automotive contract win (CORP)
The Slide Rule
12 Jan 17
What is The Slide Rule? The Slide Rule has been designed to dramatically simplify the identification of the best companies in the UK small/mid-cap sector by making a quantitative assessment of the relative potential of each company. At its core, The Slide Rule aims to identify those companies that create genuine shareholder value through strong returns on capital and solid growth, but also present a value opportunity with the potential tailwind of earnings momentum. Companies are assessed within a Quality, Value, Growth and Momentum (QVGM) framework.
N+1 Singer - Morning Song 22-02-2017
22 Feb 17
CORETX (COR LN) Contract wins and new Lifestyle facility | Gooch & Housego (GHH LN) Solid Q1 trading plus earnings enhancing acquisition of StingRay Optics | NCC Group (NCC LN) Further issues in Assurance | PCI-PAL (PCIP LN) Strong H1 underpins positive outlook | UBM (UBM LN) Results | Verona Pharma (VRP LN) Phase IIa RPL554 add-on trial to tiotropium commenced
N+1 Singer - Gym Group - Not quite a lean, fit & healthy outlook
15 Feb 17
Gym Group has done an excellent job in successfully rolling out a disruptive business model in the health & fitness market. However, we think growth expectations are too high and the shares look expensive on a FY17 P/E of 27x. We expect initial signs of increased competition / cannibalisation and LFL pressure to increase over the next 2-3 years and the shares to de-rate. We pitch our forecasts 5%-14% below consensus and initiate with a Sell recommendation and a 145p target price.
Panmure Morning Note 24-02-2017
24 Feb 17
Upgrades and increased shareholder returns were needed to justify the recent share price rally: they have been duly delivered and we expect a positive response today. FY16 was largely ‘in-line’ and initial FY17 comments, for operating profit growth YOY, are encouraging. Our initial estimate is for consensus upgrades of 5-10%. IAG has confirmed a €500m share buy-back programme, which was well flagged and we think in line with market expectations. Overall a welcome, slightly more positive read for the sector, particularly those with self-help levers. Presentation 9am GMT.
Cycle pains; structural gains
01 Feb 17
A downgrade is a downgrade, which we put through in this note (FY17 net profit -8%). The fare softness behind it is not worrisome to us, reflecting a tough point in the cycle, with industry supply/demand imbalance driving revenue yields down across the sector. Wizz Air is not immune but its own yield softness is partly self-inflicted, with management taking an aggressive capacity stance to capitalise on structural growth opportunities. This may be dilutive to near-term earnings, but should be accretive to medium-term growth and shareholder value. Experience suggests these are exactly the time to buy airline winners, which we believe Wizz Air is becoming. Limited stock liquidity can move the price up quickly as well as down. Reiterate BUY, TP unchanged at 2,300p.