Executive Summary

• Swedish fashion retailer H&M reported SEK 51.2 billion in net sales in 3Q17, below the consensus estimate of SEK 52.0 billion and up 4.6% year over year. Constant-currency sales increased by 4.0% in 3Q17.
• The company’s gross margin contracted by 260 basis points year over year, to 51.4%. Diluted EPS was SEK 2.32, down 20.3% year over year and below the consensus estimate of SEK 2.37.
• Autumn collections were off to a good start, although sales slowed somewhat toward the end of September, which falls within 4Q17. The company stated that sales for the period did not develop in line with group targets.