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
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
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
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 fresher look at the (still ongoing) Red Sea freight crisis. Happy reading!
In our sector update last week, we highlighted that it was becoming hard for ITX to beat the CSS which has been revising estimates upwards over the past two years. And yet, ITX unveiled a good set of Q1 numbers yesterday, marked by a 13th consecutive quarter of double-digit FX-n sales growth, and,
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
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
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
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
Beyond the 28% increase in FY23 dividend and robust current trading that fuelled yesterday's positive market reaction, we feel that investors also welcomed Inditex's strategic initiatives to further enhance customer experience and supply chain capabilities by 2026. These investments are set to mate
For the third year in a row, Inditex achieved double-digit FX-n sales growth with +14.1% in FY23 and EBIT margin up 200bp to 18.9%, the highest profitability level since 2012. Although some investors could be slightly disappointed by the modest margin miss in Q4 (-1% vs. CSSe), especially after the
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
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
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
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
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
Yesterday, Inditex posted better-than-expected Q3 results and a buoyant start to Q4, which confirms the group's sound fundamentals based on its unique business model. FY23 is expected to be another strong year, as evidenced by the stock's 49% ytd rally, and should be followed by a normalisation pha
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
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
The share price ended almost flat yesterday after losing nearly 4%. Following the strong YTD rally (+40% to 12th Sep), the stock was subject to profit-taking moves that might have been triggered by the "relative" sequential slowdown in current trading vs. Q2 exit rates, and/or the reiterated FY GM
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