H&M reported its Q4 this morning. With sales reported earlier, the focus is on margins. On that front, gross margin was strong at 53.7 %, up almost 4%-points y/y, but fixed costs were higher than we expected and hence EBIT fell short of our and slightly also vs. consensus. Dividend was maintained at 6.50 SEK as widely expected and the company still has the “ambition” to reach 10 % EBIT margin this year, although this is not a guidance. Dec-Jan sales are down 4 % in local currencies, which looks like a weaker than expected start for the year.
Company also announced a change of CEO as Helena Helmersson is stepping down and Daniel Erver, currently head of H&M-chain, is appointed as CEO. Erver has been in the company for 18 years are will continue to lead the main brand H&M. We see this as a very smooth-looking transition to a solid internal candidate.
