H&M's Q4 results beat our forecasts thanks to a strong gross margin. However, we kept our estimates largely intact and continue to see sales and margin improvement in 2025-26. We see earnings growth and dividends offering a reasonable expected return.

H&M will report its Q4’24 (September-November) results on Thursday at 8:00 am CEST. We expect slightly positive revenue growth both in local currencies and reported terms. However, we expect EBIT to decline year-on-year due to a slightly lower gross margin and stable opex/ sales. We expect a positive top line development for the beginning of the fiscal year 2025.

We believe consumer demand has remained subdued in H&M’s Q4 (Sep-Nov), although the strong September should support growth. We have lowered our margin assumptions for 2025 and beyond.

H&M released its Q3 report at the end of September. In this interview analyst Rauli Juva summarizes the main takeaway from the report.

H&M delivered weaker-than-expected earnings for Q3. While September sales growth was a positive data point, we see margin headwinds continuing in Q4 and do not expect the company to reach its 10% EBIT margin target in 2025 either.

H&M will report its Q3’24 (June-August) results on Thursday at 8:00 am CEST. We expect revenue growth to be slightly positive in local currencies, but negative in reported terms. We expect EBIT to decline y/y with a roughly stable gross margin and slightly higher opex with a negative sales trend hitting the earnings.