Executive Summary

• For 3Q18, H&M reported a 6.6% increase in gross profit—to SEK 28.1 billion—yielding a gross margin of 50.3%. The company had already reported total 3Q18 sales growth of 9.0%.
• Operating income was SEK 4.0 billion, down by nearly 20% year over year and slightly below the consensus estimate of SEK 4.1 billion.
• In 4Q18, H&M expects no year-over-year increase in markdowns and expects sourcing costs to be slightly positive in light of the weakening US dollar against its basket of currencies.