From CNBC: 2024-03-27 09:47:51

Shares of H&M surged 14% after posting a higher-than-expected operating profit of 2.08 billion Swedish kronor in the first quarter, beating analysts’ forecast of 1.43 billion kronor. Net sales slightly dropped to 53.7 billion kronor from the previous year, as the retailer focuses on profitability amid competition from other fast-fashion brands like Zara and Shein.

H&M aims for a 10% operating margin this year, with CEO Daniel Ervér highlighting improved gross margins, lower inventory, and strong cash flow in the first quarter. The company plans to lower prices by the end of 2024 and reduce excess unsold stock, with a 7% decrease in inventory year on year in the quarter.

Despite a mixed top-line performance, Jefferies analysts emphasized a “sizeable gross margin beat” of 51.5% and positive sales momentum supporting H&M’s 10% operating margin target. The company’s share price has seen volatility, dropping 37% in 2022 before rebounding with a 57% gain in 2023.



Read more at CNBC:: H&M shares jump 14% as profit smashes expectations