Shares of fashion giant H&M drop as fourth-quarter sales miss estimates – CNBC

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H&M posted operating profit of 17.3 billion Swedish krona ($1.57 billion) for 2024, versus the 17.2 billion Swedish krona forecast by analysts in an LSEG poll.Fourth-quarter operating profit came in at 4.6 billion Swedish krona versus the 4.2 billion Swedish krona analysts had predicted.Shares of H&M closed down more than 3% Thursday.”Sales and operating profit increased in the fourth quarter driven by strong online sales, well-received women’s fashion collections and effective cost control. By focusing on our core business and delivering on our plan, we are on track towards long-term, profitable growth,” CEO Daniel Ervér said in a statement accompanying the results.Looking ahead, Ervér said he expected pressure on consumers to alleviate further in 2025, and added that the company was well placed to deal with any “negative external” impacts in international trade.”While continued challenging macroeconomic conditions and geopolitical uncertainty may impact the consumer sentiment during 2025, we see some positive signs such as inflation and interest rates going down,” he said.”Our diversified supply chain gives us the flexibility needed to mitigate negative external impact in different markets. This, together with our business idea — fashion and quality at the best price in a sustainable way – creates a strong resilience and positions us well for growth in the global fashion market.”H&M has been struggling to compete against Inditex-owned rival Zara, as well as lower-cost retailers such as Chinese-founded fast fashion giant Shein.In September, the company scrapped its earnings margin target for 2024 as higher costs and increased competition hit third-quarter operating profit.The results mark the latest test for CEO Ervér, who was appointed to the role in January 2024 to accelerate the group’s turnaround.Speaking at a media presentation shortly after the earnings release Thursday, Ervér said the company was targeting long-term sales growth of at least 10% per year, an operating margin above 10%, and a 56% reduction in greenhouse gas emissions by 2030 versus 2019 levels.”I’m pleased with the early progress but I believe there is further potential for us,” he added.Got a confidential news tip? 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Source: https://www.cnbc.com/2025/01/30/hm-hmb-earnings-q4-full-year-fy24.html