H & M Hennes & Mauritz (OM:HM B) Is Up 13.6% After Q3 Profit Surge and Store Restructuring Success – Has the Bull Case Changed?

• H&M reported a 40% year-over-year increase in operating profit for the third quarter, surpassing analyst expectations through cost controls, streamlined operations, and a growing digital presence, even as it reduced its store count by 4% compared to last year.
• The company's recent moves included closing 135 underperforming stores, expanding successfully into Brazil, and upscaling its brand with redesigned store experiences, though management cautioned that tariffs may weigh on results in the coming months.
• We'll explore how H&M's strong operating profit growth and successful market expansion impact the company's future investment outlook.

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H & M Hennes & Mauritz Investment Narrative Recap

To own H&M shares, you need confidence in the company’s ability to grow profits by optimizing its store base, investing in digital sales, and strengthening brand value, even as external headwinds like tariffs and slowing key market sales pose a risk to margins. The recent third quarter operating profit surge affirms that cost control and operational improvements remain an important catalyst, but management’s warning on tariffs highlights that these external factors may pressure results in the near term. The most relevant company announcement is the well-received opening of H&M’s first store in Brazil, which aligns directly with the news of successful market expansion and points to the importance of growth in new geographies as a key counterbalance if established market sales soften or face major headwinds. On the other hand, with tariff costs forecast to increase and directly weigh on upcoming quarters, investors should be mindful that ...

Read the full narrative on H & M Hennes & Mauritz (it's free!)

H & M Hennes & Mauritz's projections suggest SEK242.9 billion in revenue and SEK14.3 billion in earnings by 2028. This is based on a 1.4% annual revenue growth rate and an earnings increase of SEK4.4 billion from the current SEK9.9 billion.

Uncover how H & M Hennes & Mauritz's forecasts yield a SEK136.83 fair value, a 21% downside to its current price.

Exploring Other Perspectives

Simply Wall St Community fair value estimates for H&M range widely from SEK136,833 to SEK407,149 across 5 different viewpoints. While profit growth and international expansion provide optimism, persistent tariff pressures could affect future performance, so weigh multiple perspectives when considering your own outlook.

Explore 5 other fair value estimates on H & M Hennes & Mauritz - why the stock might be worth over 2x more than the current price!

Build Your Own H & M Hennes & Mauritz Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your H & M Hennes & Mauritz research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.
• Our free H & M Hennes & Mauritz research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate H & M Hennes & Mauritz's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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