H&M thud in Stockholm after disappointing quarterly report and CEO resignation
The CEO will be replaced with immediate effect by Daniel Ervér, who has worked for the group for 18 years
2' min read
2' min read
(Il Sole 24 Ore Radiocor) - Sales on H&M on the Stockholm Stock Exchange, after lower-than-expected margins in the fourth quarter and the resignation of CEO Helena Helmersson, who has led the company for four years. The CEO will be replaced with immediate effect by Daniel Ervér, who has worked for the group for 18 years. The share price dropped almost 10 per cent shortly after the opening of trading and then fell back to around 8 per cent. The Swedish retail apparel giant, the world's number two in the sector, reported an operating profit of SEK 4.51 billion ($433.2m) in the quarter ending 30 November, below the consensus of SEK 4.66 billion. The group returned to profit of SEK 1.59bn, but analysts had expected a higher profit of SEK 3.19bn for the period.
Sales for the period were also below expectations. Then came the surprise resignation of CEO Helena Helmersson, who has been with the company for 26 years and will be replaced by the head of the group's core brand, Daniel Erver, also a group veteran. The market is wondering whether with the surprise change of guard will also come the necessary change of course, after H&M has lost a fifth of its market value in the last four years. H&M has confirmed that it wants to achieve an ebit margin of 10% in 2024, "however, describing this now as an ambition rather than a target", say Jefferies analysts. The current consensus sees the margin at 8.8%. The group is also aiming to double its sales from 2021, an 'unachievable' target according to Bernstein's experts, who point out that 'the new ceo will not necessarily have the mandate to take the radical steps necessary to turnaround the business'.
