H&M: 2Q sees another underlying cost beat

Research evidence excerpt

H&M: 2Q sees another underlying cost beat

Deutsche Bank

Research

Rating Company Date

Hold H&M 25 June 2026

Results

Europe

Sweden

Reuters Bloomberg Exchange Ticker Price at 24 Jun 2026 (SEK) 168.70

HMb.ST HMB SS STO HMb

Price Target (SEK) 160.00

Retail

Retail - Non Food ADR ISIN 52-week range (SEK) 194.25128.35-

HNNMY US4258831050

2Q sees another underlying cost beat

Valuation & Risks

Adam Cochrane

DB View Research Analyst

2Q would see something for the bulls and bears on this print. Reported 2Q EPS was +44-20-754-17812

c.-8% below consensus at SEK 2.49 (cons SEK 2.72) largely driven by a one off

Shwetha Ramachandran

restructuring cost of SEK 679m. Without this the EPS would have been c.5% ahead. Research Associate

cFX sales were -1% vs cons -0.5% (DBe -1%), gross margin up +120bp vs cons

+110bp including a bigger markdown impact than expected, opex/sales up 90bp to

Benjamin Yokyong-Zoega

45.8% (cons 45.0%) from 44.9% last year although with underlying cFX opex -2%

Research Analyst

yoy and pre restructuring this was 44.6%. Period end inventory was down -10% yoy

+44-20-754-12338

(-2% in cFX) and is now 15.8% of rolling 12m sales.

Price/price relative

The current trade for June is broadly flat which compares to DBe flat although

slightly weaker than raised bar at c.1% in our view given the warmer weather. The

outlook for gross margin in 3Q is for flat markdown yoy and flat external factors (DBe 200

+40bp). Overall despite the headline miss, the underlying EPS is better than 150

expected although the current trading is a bit disappointing which when combined 100

2024 2025 2026

with increased opex pressures and falling gross margin support is a less attractive

investor set up in our view. We expect to see the shares underperform slightly today H&M – (Rebased)

on the print.