STOCKHOLM, August 18, 2026, 14:37 CEST — Shares in H & M Hennes & Mauritz AB STO:HM-B rose 3.3% on Tuesday after Citi added the company to its positive catalyst watch ahead of September results.
H&M shares climbed to SEK 178.40, standing 4.1% higher than Citi’s updated SEK 171 price target and 13.3% above the average analyst estimate. The stock’s valuation indicates the market expects a stronger recovery than most analysts project.
Another indication emerges as a competitor steps back. River Island will shut its Sheffield city-centre branch amid a restructure involving 33 outlets. The company is also negotiating for reduced rents at 71 sites.
This opens up vacancies along Britain’s high street, though it does not resolve the sector’s sluggish footfall and pressure from online pricing. H&M closed May with 128 fewer outlets compared with the same point last year.
| Physical-store changes | Number | Proportion of total locations |
|---|---|---|
| H&M net decrease in stores, year through May | 128 stores | 3.1% |
| H&M total stores as of May 31 | 4,038 | Global network |
| Projected River Island store closures | 33 out of 230 stores | 14.3% |
| River Island rent reduction requests | 71 out of 230 stores | 30.9% |
Citi’s short-term outlook relies more on earnings performance than on market share gains. Analysts including Monique Pollard increased their third-quarter sales growth projection to 0.8% from a previously expected 0.5% drop. They predict adjusted operating profit to come in 4% higher than Visible Alpha consensus figures.
Citi lifted its earnings forecasts for fiscal 2026 and 2027 by 6% and 7%, respectively. The projections factor in improved cost management and a third-quarter gross margin of 53.3%. While potential tariff reimbursements could total SEK 1.45 billion, Citi noted that the timing is still unclear.
| H&M second-quarter measure | 2026 | 2025 | Change |
|---|---|---|---|
| Net sales | SEK 54.83 billion | SEK 56.71 billion | -3.3%; nearly unchanged in local currencies |
| Gross margin | 56.6% | 55.4% | +1.2 points |
| Operating profit before one-offs | SEK 6.59 billion | SEK 5.91 billion | +11.5% |
| Adjusted operating margin | 12.0% | 10.4% | +1.6 points |
| Inventory | SEK 34.94 billion | SEK 38.82 billion | -10.0% |
Margins are indeed recovering, but sales are still lacking. CEO Daniel Ervér stated that stricter controls on inventory had “affected our ability to fully meet demand.” The company forecasted June sales in local currency would show no growth.
Analysts are still wary. Only one out of 26 suggests buying the stock; 13 advise selling. The consensus price target is SEK 154.70.
| Analyst recommendation | Count | Share of 26 |
|---|---|---|
| Buy | 1 | 3.8% |
| Hold | 12 | 46.2% |
| Sell | 13 | 50.0% |
| Average target | SEK 154.70 | 13.3% under Tuesday’s close |
| Target range | SEK 114-SEK 200 | Broad range of estimates |
| Citi target | SEK 171 | 4.1% under Tuesday’s close |
Risks: Tuesday’s pricing was recorded intraday and could be undone. Citi’s outlook hinges on faster sales, limited cost growth and unclear tariff recoveries. River Island’s shutdowns might indicate softer demand in the segment, rather than a shift in market share.
The bar is now set high for the September report. H&M needs to convert improved margins into increased sales. While competitors leaving the market provide some support, current valuation largely factors in much of Citi’s catalyst.
