Hennes & Mauritz AB B Stock
Hennes & Mauritz AB B Stock
Pros and Cons of Hennes & Mauritz AB B in the next few years
Pros
Cons
Performance of Hennes & Mauritz AB B vs. its peers
| Security | Change(%) | 1w | 1m | 1y | YTD | 3y | 5y |
|---|---|---|---|---|---|---|---|
| Hennes & Mauritz AB B | 0.060% | 7.573% | 5.996% | 34.545% | -7.581% | 4.055% | -9.807% |
| LVMH Moët Hennessy Louis Vuitton S.A. ADR | -1.050% | 3.254% | -1.653% | 0.847% | -25.333% | - | - |
| Swatch Group SA ADR | 1.670% | 2.235% | -13.679% | 11.585% | 5.172% | -33.212% | -33.212% |
| Swatch Group AG | 1.540% | 6.182% | -9.595% | 24.065% | 6.766% | -22.976% | -22.700% |
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The analysis provided is generated by an artificial intelligence system and is provided for informational purposes only. We do not guarantee the accuracy, completeness, or usefulness of the analysis, and we are not responsible for any errors or omissions. Use of the analysis is at your own risk.Hennes & Mauritz’s fiscal 2024 results paint a picture of a group that is becoming more profitable even as top-line momentum appears to have stalled. Revenue edged down slightly to SEK 234.5 billion, a decline of less than one percent from the prior year. In contrast, net income surged by roughly a third to SEK 11.6 billion. The combination of a flat top line and sharply higher earnings suggests that management’s focus on cost efficiency and full-price sales is bearing fruit, though the sustainability of this trajectory in a fiercely competitive fast-fashion market remains an open question.
The margin profile improved across the board. Gross margin climbed from 51.2% to 53.4%, which could indicate better sourcing, fewer markdowns, or a favourable channel mix. Operating margin expanded from 6.2% to 7.4%, and the net margin reached 4.9%, well above the 3.4% average of the past three years. Return on equity more than doubled from the low point of 2022, finishing at a striking 25%, lifted both by the earnings recovery and a modest contraction in equity as dividends and share buybacks more than absorbed retained profits. Such a high return on a relatively thin capital base is supported by financial leverage of nearly four times, largely a function of the group’s asset-light operating model and the substantial off-balance-sheet-like character of its store network under IFRS 16.
The balance sheet reveals a company with no net interest-bearing debt—cash of SEK 17.3 billion comfortably exceeds any drawn loans—but it carries a substantial load of lease liabilities, with non-current lease obligations of SEK 50.4 billion and current lease liabilities of SEK 12.5 billion. Correspondingly, right-of-use assets represent the largest single item among non-current assets. This structure keeps invested capital low and returns high, yet it also means a significant share of future operating costs is effectively fixed through rental commitments. The current ratio of 1.14 looks adequate, though inventory, at SEK 40.3 billion, forms a sizeable part of current assets and would need to be carefully managed if demand softens further.
