H and M Hennes and Mauritz AB

H&M maintains a leveraged capital structure with a debt-to-equity ratio of 1.81, indicating significant reliance on debt financing relative to shareholder equity. The balance sheet shows total liabilities of 127.35 billion SEK against total equity of 42.92 billion SEK. Liquidity is assessed as medium risk, supported by a current ratio of 1.18, which suggests adequate short-term asset coverage for current liabilities. However, the company holds only 0.94 billion SEK in cash and equivalents against 77.55 billion SEK in long-term debt, resulting in a negative net cash position. Operating cash flow stands at 31.12 billion SEK, providing substantial coverage for debt service and operational needs, while free cash flow is recorded at 10.93 billion SEK after capital expenditures of 10.68 billion SEK.

Profitability metrics indicate strong returns on capital, with a return on equity (ROE) of 28.66% and a return on assets (ROA) of 7.22%. The company generated 228.29 billion SEK in revenue, resulting in a gross profit of 121.82 billion SEK, which implies a gross margin of approximately 53.4%. Operating income was 18.40 billion SEK, leading to a net income of 12.16 billion SEK. These figures demonstrate efficient conversion of sales into profit, although the high leverage amplifies the equity returns. The operating margin of approximately 8.1% reflects the competitive nature of the retail sector, where volume and inventory management are critical to maintaining profitability.

The provided data does not include specific segment or geographic revenue breakdowns, limiting the analysis of revenue concentration risks. Without detailed segment data, it is not possible to assess the relative contribution of different product lines or regional markets to the overall revenue base. The absence of this information prevents a granular evaluation of exposure to specific economic cycles or consumer trends in different geographies. Analysts typically monitor the performance of key markets such as Europe, North America, and Asia to gauge growth drivers, but this specific data is not present in the current snapshot.

Growth trajectory analysis is constrained by the absence of historical period data in the provided input. Without multi-year revenue or net income trends, it is not possible to calculate year-over-year growth rates or assess the consistency of earnings performance. The current financial snapshot provides a static view of the company's financial health but lacks the temporal dimension required to evaluate momentum or deceleration in business activity. Future analysis would require access to historical financial statements to contextualize the current performance against past trends.

Risk assessment highlights medium liquidity risk and low dilution risk. The key flag notes that net cash is negative after subtracting total debt, which underscores the importance of maintaining strong operating cash flows to service debt obligations. The low dilution risk suggests that the company is not currently engaging in significant equity issuance that would erode shareholder value. The share count remains stable with 1.40 billion basic and diluted shares outstanding, indicating no recent significant equity dilution events. The primary risk lies in the company's ability to manage its debt load in a potentially rising interest rate environment or during periods of reduced consumer spending.

Recent observations from investor relations indicate a cautious analyst sentiment, with a mean recommendation of 3.43 on a scale where 1 is a strong buy and 5 is a strong sell. The mean price target is 159.70 SEK, with a median of 157.50 SEK, suggesting limited upside potential from current levels. The high price target of 200.00 SEK and low of 120.00 SEK reflect a wide range of analyst expectations. The distribution of recommendations shows 1 strong buy, 2 buys, and 13 holds, indicating a predominantly neutral stance among analysts. This sentiment may reflect concerns about the competitive landscape, macroeconomic headwinds, or the company's leverage profile.

H&M generated 12.2 billion SEK in net income for fiscal year 2026, reflecting a 4.6% year-over-year increase.

Operating income grew 6.3% year-over-year to 18.4 billion SEK in fiscal 2026, demonstrating improved operational efficiency.

Cash conversion ratio of 2.53 places H&M in the top quartile, exceeding the cohort median of 1.22.

Analysts maintain a mean price target of 159.70 SEK, suggesting potential upside from current market levels.

H&M faces high credit risk according to internal risk assessments, signaling potential financial stability concerns.

The debt-to-equity ratio of 1.81 is in the bottom quartile, far exceeding the cohort median of 0.33.

Revenue declined 2.6% year-over-year to 228.3 billion SEK in fiscal 2026, indicating slowing top-line growth.

Free cash flow decreased 2.9% year-over-year to 10.9 billion SEK in fiscal 2026, reducing liquidity generation.

Revenue kr 54.83B, −3,3% YoY; Operating income −0,0% YoY.

• ▍Revenue kr 54.83B, −3,3% YoY
• ▍Operating income −0,0% YoY
• ▍Net income +0,2% YoY
• ▍Free cash flow +8,1% YoY
• ▍Net margin 7.3%

Revenue kr 49.61B, −10,3% YoY; Operating income +25,7% YoY.

• ▍Revenue kr 49.61B, −10,3% YoY
• ▍Operating income +25,7% YoY
• ▍Net income +22,7% YoY
• ▍Free cash flow −15,6% YoY
• ▍Net margin 1.5%

Revenue kr 59.22B, −4,8% YoY; Operating income +37,6% YoY.

• ▍Revenue kr 59.22B, −4,8% YoY
• ▍Operating income +37,6% YoY
• ▍Net income +41,4% YoY
• ▍Free cash flow +124,5% YoY
• ▍Net margin 7.4%

Revenue kr 57.02B, −3,4% YoY; Operating income +40,1% YoY.

• ▍Revenue kr 57.02B, −3,4% YoY
• ▍Operating income +40,1% YoY
• ▍Net income +39,3% YoY
• ▍Free cash flow −48,3% YoY
• ▍Net margin 5.7%

Revenue kr 56.71B; Operating income kr 5.91B.

• ▍Revenue kr 56.71B
• ▍Operating income kr 5.91B
• ▍Net margin 7.0%

Revenue kr 55.33B; Operating income kr 1.20B.

• ▍Revenue kr 55.33B
• ▍Operating income kr 1.20B
• ▍Net margin 1.1%

Revenue kr 62.19B; Operating income kr 4.62B.

• ▍Revenue kr 62.19B
• ▍Operating income kr 4.62B
• ▍Net margin 5.0%

Revenue kr 59.01B; Operating income kr 3.51B.

• ▍Revenue kr 59.01B
• ▍Operating income kr 3.51B
• ▍Net margin 3.9%

Revenue kr 228.28B, −2,6% YoY; Operating income +6,3% YoY.

• ▍Revenue kr 228.28B, −2,6% YoY
• ▍Operating income +6,3% YoY
• ▍Net income +4,6% YoY
• ▍Free cash flow −2,9% YoY
• ▍Net margin 5.3%

Revenue kr 234.48B, −0,7% YoY; Operating income +19,1% YoY.

• ▍Revenue kr 234.48B, −0,7% YoY
• ▍Operating income +19,1% YoY
• ▍Net income +32,9% YoY
• ▍Free cash flow +0,2% YoY
• ▍Net margin 5.0%

Revenue kr 236.03B, +5,6% YoY; Operating income +102,8% YoY.

• ▍Revenue kr 236.03B, +5,6% YoY
• ▍Operating income +102,8% YoY
• ▍Net income +145,2% YoY
• ▍Free cash flow +40,6% YoY
• ▍Net margin 3.7%

Revenue kr 223.55B, +12,4% YoY; Operating income −53,0% YoY.

• ▍Revenue kr 223.55B, +12,4% YoY
• ▍Operating income −53,0% YoY
• ▍Net income −67,6% YoY
• ▍Free cash flow −56,5% YoY
• ▍Net margin 1.6%