H&M Shares Slide After Results Miss Expectations
By Andrea Figueras
Shares in H&M Hennes & Mauritz dropped after the company posted an operating profit for its fiscal fourth quarter that missed analysts' expectations.
At 0859 GMT on Wednesday shares traded 7.9% lower at SEK155.02.
The Swedish fashion retailer booked an operating profit of 4.51 billion Swedish kronor ($433.2 million) for its final quarter ended Nov. 30, missing consensus estimates of SEK4.66 billion, according to Visible Alpha.
H&M swung to a net profit of SEK1.59 billion, from a net loss of SEK864 million in the year-earlier period. However, analysts had forecast a net profit of SEK3.19 billion for the period, according to a FactSet-compiled poll of estimates.
Sales for the quarter were flat on year at SEK62.65 billion, missing analysts' forecasts of SEK62.9 billion, according to a FactSet data.
The company also promoted the head of its core brand, Daniel Erver, to chief executive officer and president.
Erver, who has worked for 18 years at the company, will retain responsibility for the H&M brand and takes over as CEO with immediate effect.
He will succeed Helena Helmersson, who has decided to step down after 26 years at the company and four years as CEO.
"We remain unconvinced and think they will deliver weak sales and weak margins, and the new CEO will not necessarily have the mandate to take the radical steps to turnaround the business," Bernstein analysts said in a research note.
H&M backed its target for fiscal 2024 of a 10% operating margin and said it expects profitability to exceed this over time.
It also aims to double sales by 2030 compared with the figure from 2021, when it booked sales of SEK198.97 billion.
"We think these targets are unachievable," Bernstein analysts said.
Write to Andrea Figueras at andrea.figueras@wsj.com
(END) Dow Jones Newswires
January 31, 2024 04:26 ET (09:26 GMT)
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