RBC Updates Forecasts for H&M on Expected 'Slightly Lower' Sales, Higher Tech Spend in Fiscal H2

05:59 AM EDT, 08/25/2026 (MT Newswires) -- RBC Capital Markets revised its estimates for H&M Hennes & Mauritz (HM-B.ST), noting expectations of "slightly lower" like-for-like sales and increased operating expenses in the fiscal second half, partly moderated by an anticipated improvement in gross margin. "We model sales +1% yoy in cc for Q3. June was flat yoy and H&M had easier comps in July and August. The heatwaves early in the quarter were a positive, since H&M tries to be a summer destination retailer. Heatwaves towards the end of the quarter are less supportive; H&M would prefer a shift in the weather towards cooler temperatures now," according to a Tuesday research report on European retailers. Analysts said H&M's fiscal third-quarter supply chain conditions have remained largely insulated from broader global port closures and vessel availability constraints. Easing raw material and energy prices have further stabilized sourcing conditions, which the research firm believes provides clearer operational visibility. "H&M is ramping up tech investments heading into the autumn (e.g. [enterprise resource planning], the online platform, [point of sale] systems). It has not guided to a split between Q3 and Q4. The full-year guidance is still for low-single-digit up in [selling, general, and administrative expenses] for the full year, which does imply an uplift in H2, but it remains to be seen how this will be apportioned between Q3 and Q4," the note said. Against this backdrop, RBC lowered its EPS projections by 2% to 3% for fiscal 2026 and 2027. The stock is rated sector perform, with a price target of 175 kronor.