Executive Summary

• Swedish fast-fashion retailer H&M reported SEK 98.4 billion in net sales in 1H17, slightly below the consensus estimate of SEK 98.8 billion and up 8.6% year over year. Constant-currency sales increased by 5.0% in 1H17 and UK sales increased by 6.0%.
• The company’s gross margin contracted by 20 basis points year over year, to 54.7%. Diluted EPS was SEK 5.05, up 5.9% year over year and above the consensus estimate of SEK 4.84.
• H&M expects June 2017 group monthly sales including VAT to increase by 7% year over year in constant currencies. The company is targeting a 10%–15% increase in group sales in constant currencies in FY17.