reports
- Cedric Rossi
- Clement Genelot
- Loic Morvan
- Paul Rouviere
- Philippine Adam
On the shelves now: Consumer weekly #41
In this Consumer Weekly newsletter, we provide a brief overview of the key factors affecting our Consumer coverage, from Luxury & Consumer goods to Retail & E-commerce and Food & Ingredients. This week, we look at the endless reshuffling of European purchasing alliances among food retai
- Cedric Rossi
H&M: blurred margin trajectory due to brand's investments to fuel sale...
Although the reduced 10% margin target came as no surprise since the CSSe has always been more conservative (8.2%e prior to Q3 publication), it reflects H&M's initiatives around brand activation and improved competitiveness to revitalise top-line growth. Negative external factors and markdown i
- Cedric Rossi
H&M: encouraging start to Q4 after an uninspiring Q3
The Q3 results unveiled this morning missed CSSe at both the sales and EBIT levels (-3% and -26% respectively), confirming once again that H&M is clearly more sensitive than ITX to volatile market conditions. On a positive note, sales trends have shown a gradual recovery with +3% FX-n over July
- Cedric Rossi
Fashion: sweet or sour Back-to-School?
While publications of US retailers this week (e.g.: Gap, Abercrombie & Fitch, lululemon, etc) should give the market a clearer view of the US consumer mood, the European consumer mindset is set to be reflected in H&M and Inditex's publications next month. As expected, the summer has been no
- Cedric Rossi
Fashion: will plans to impose duties on cheap goods disrupt Shein and ...
The very competitive prices offered by Shein and Temu stem from their ability to take advantage of tax loopholes allowing parcels to be shipped without having to pay duties and taxes as long as they are under a certain value. As the EU Commission is moving to scrap the EU's EUR150 import tax loopho
- Cedric Rossi
- Clement Genelot
- Loic Morvan
- Paul Rouviere
- Philippine Adam
On the shelves now: Consumer weekly #35
In this Consumer Weekly newsletter, we provide a brief overview of the key factors affecting our Consumer coverage, from Luxury & Consumer goods to Retail & E-commerce and Food & Ingredients. This week, we look at the political uncertainty that is clearly set to drive stock markets unti
- Cedric Rossi
H&M: Doubts on profitability, or on Europe's political stability?
In our view, yesterday's 13% drop in the share price is mainly due to weakening investor sentiment amid political turmoil (Europe is 63% of H&M's revenue), rather than to disappointing June sales (-6% FX-n), as CSSe (9.1%) was already well below the company's EBIT margin target of 10%. Arguably
- Cedric Rossi
Fashion: consumers backpedaling on sustainability due to inflation
In our recent Fashion report "Is sustainability the new luxury?", we were highlighting the green consumer paradox vis-a-vis sustainable brands. A McKinsey survey just discovered that consumers are indeed de-emphasising the importance of ESG in their purchases in an inflation-impacted world. This wo
- Cedric Rossi
Fashion: a wet spring but blooming publications
Despite a wetter-than-average spring season over a large part of Europe, key European fashion markets have shown some resilience over recent months, partly thanks to a gradual improvement in European consumer sentiment. Inditex is due to report Q1 results (February-April) on 5th June, followed by H
- Cedric Rossi
Fashion: Is sustainability the new luxury?
The bankruptcy of circular fashion startup Renewcell combined with the stellar success of Chinese platforms Shein and Temu have highlighted the green consumer paradox: consumers say they want sustainable clothing, but the majority are not tending to buy them, especially at a time when cost-of-livin
- Cedric Rossi
H&M: Q1 margin trajectory more appealing than sales trends
Q1 2024 results unveiled yesterday by H&M showed impressive profit momentum, while March sales (+2% FX-n) improved sequentially vs. Q1 (-2% FX-n), albeit well below the pace of growth at Inditex. Although we increase our FY24 estimates by 5% following these stronger-than-expected Q1 profits, we
- Cedric Rossi
- Clement Genelot
- Loic Morvan
- Paul Rouviere
- Philippine Adam
On the shelves now: Consumer Weekly #21
In this Consumer Weekly newsletter, we provide a brief overview of the key factors affecting our Consumer coverage, from Luxury & Consumer goods to Retail & E-commerce and Food & Ingredients. This week, we look at the expected growth recovery among e-commerce players and the necessary b
- Cedric Rossi
- Clement Genelot
- Loic Morvan
- Paul Rouviere
- Philippine Adam
On the shelves now: Consumer Weekly #15
In this Consumer Weekly newsletter, we provide a brief overview of the key factors affecting our Consumer coverage from Luxury & Consumer goods, to Retail & E-commerce and Food & Ingredients. This week, we take a look at the latest economic data on US consumers as we think they could pr
- Cedric Rossi
H&M: margin upturn slow to materialise
The change in CEO announced yesterday clearly took the spotlight over weaker-than-expected Q4 results. H&M is also experiencing a tougher start to Q1 relative to Inditex and Primark given the sales decline of 4% FX-n between 1st December and 28th January, as well as a markdown impact of 100bp e
- Cedric Rossi
- Clement Genelot
Red Sea tensions: looming risk of a new wave of inflation
In our first note last month "Will Red Sea tensions disrupt our groups' supply chains?" we discussed why the first attacks on commercial shipping routes were unlikely to cause major supply chain disruption for our companies, provided they did not last too long. However, since then, the attacks have
- Cedric Rossi
- Clement Genelot
Nike cuts H2 sales outlook on weaker demand and increased macro headwi...
Following signs of a more cautious consumer spending and promotional environment, especially in EMEA and China, Nike has taken the strategic decision to reduce supply within the marketplace, thus prompting the sales warning on H2 FY24. Management expects to offset this softer sales growth with a co
- Cedric Rossi
- Clement Genelot
Will Red Sea tensions disrupt supply chain of our groups?
Following several attacks on commercial shipping since mid-November, seven of the largest shipping firms announced they would redirect their container ships from the Red Sea and the Suez Canal and switch to a safer route around Africa. This traffic rerouting implies additional costs and delays when
- Cedric Rossi
- Clement Genelot
Fashion: consumers (slowly) reappear as autumn arrives
Due to changing weather conditions and unpredictable consumer demand, fashion markets proved to be quite volatile between September and November, with soft numbers achieved in some European markets relative to the US during Black Friday. As the black clouds lingering over fashion are not set to cle
- Cedric Rossi
All eyes on margin improvement potential
Disappointing current trading was obviously overshadowed by the Q3 EBIT beat (+4% vs. CSS), highlighting strong execution in cost management and the ramp-up of the cost & efficiency programme. While this healthy performance lends credibility to the FY24 EBIT margin target of 10%, H&M needs
- Cedric Rossi
- Clement Genelot
Fashion: Only when the tide goes out do you discover... who the winner...
One of Warren Buffet's famous quotes has never been truer for fashion groups that have been dealing with low tides over recent years: Covid-related lockdowns, supply chain disruption, excess inventory, promotional activity and volatile consumer sentiment. Unsurprisingly, Inditex is successfully wea
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