European Apparel Retail: Steadier into summer

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European Apparel Retail: Steadier into summer

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European Apparel Retail

Steadier into summer

Price Objective Change

A return to fundamentals 08 July 2026

After a couple months of macro-driven sentiment in the sector, we expect investors to Equity

shift back to single-stock fundamentals. The Middle East conflict impacts have strongly Europe

abated (costs, growth), as raw material costs declined in June, while growth Apparel Retail

reaccelerated in May and June. We believe a better macro environment will be more Joffrey Bellicha Meller >>

prone to see increased competitive dynamics, particularly in the value segment. Research Analyst

Following the recent results, we lower our earnings estimates for ABF (Exhibit 1) and MLI+44 (UK)20 7995 7497

H&M (Exhibit 3) and reduce our H&M price objective to SEK145 from SEK150 with the joffrey.bellichameller@bofa.com

valuation method unchanged. We reiterate our Underperform ratings on both. With Ashley Wallace >>

Research Analyst

Zalando and Next set to report on 4-5 August, we raise our estimates for both ahead of Merrill Lynch (Australia)

the results, and increase our Next PO to £145 (from £140), keeping our valuation ashley.d.wallace@bofa.com

methodology intact, and reiterate our Neutral rating. We continue to favour higher Thierry Cota >>

growth equity stories in the space (Buy ITX), and self-help stories (Buy Zalando). BofASE (France)

thierry.cota@bofa.com

Growth: Broadbased re-acceleration in May and June Daria Nasledysheva >>

Across our tracker (Exhibit 12), 20 out of 22 countries that reported so far showed a MLI (UK)

sequential acceleration in May vs April. Germany data improved sequentially in May and daria.nasledysheva@bofa.com