H&M’s accounts are progressively improving, with net profit rising and debt becoming less and less large. At its origin are good numbers for the fashion brand in the USA and Germany, which encourage stock market investors.
After being one of Sweden’s most valuable companies for several years, time has brought challenges, with the fashion industry selling items at increasingly lower prices. This is the case of Zara (Inditex), Primark (Associated British Food) and platforms online like Shein.
According to an analysis by brokerage firm XTB, H&M has been on a path to recovery in the sector over the last few years. Improvements in several metrics support this idea, as is the case with the increase in net profit (although somewhat volatile), while the company is able to retain above 50% gross margin.
Although the turnover volume remains stable, the operation appears to be becoming more efficient. At the same time, H&M recorded a reduction in the amount owed and an increase in operating cash flow.
The increase in retail sales contributes greatly to this situation, especially in Germany and the United States.
Stock market appreciation
Listed on the Stockholm stock exchange, the company increased in value by 16%. The trend is even more evident if calculations are made in comparison with the relative minimums recorded at the beginning of April, after “Liberation Day”, decreed by Donald Trump (announcement of tariffs for almost all countries in the world). H&M’s share price on the stock market has soared 38% since that date.
At the moment, the bonds are worth around 178 Swedish kronor (16.23 euros, at the current exchange rate).