H&M’s Struggles Self-Inflicted – At Least Tariffs Aren’t a Problem — Panjiva
Más

Panjiva_research_logo

H&M’s Struggles Self-Inflicted – At Least Tariffs Aren’t a Problem

Cons. Discr. - Apparel 214 Earnings 365 U.S. 3297

Fashion retailer Hennes & Mauritz reported second quarter net profits (to May 31) fell by 21.3% on a year earlier vs. analyst expectations of a 15.8% decline, S&P Global Market Intelligence reports. Supply chain problems, specifically an “imbalance in its merchandise assortment and inventories carried over from prior quarters” were in part to blame.

A longer-term decline in demand may also be to blame. Panjiva data shows U.S.-inbound volumes of H&M products fell by 8.5% in the three months to April 30 (merchandise sold through May 31). A turnaround may take a while to arrive with imports in May and June down a further 11.7% on a year earlier based on preliminary data.

HENNES HASN’T HAD MUCH LUCK

Chart shows U.S. seaborne shipments associated with Hennes & Mauritz. Lower panel indicates change vs. a year earlier.  Source: Panjiva

One risk that H&M shouldn’t have to face is supply chain disruptions from escalating trade spats centered on the U.S. – so far American duties do not cover apparel as outlined in Panjiva research of June 19. Its supply chain for the U.S. market does have a significant component from China (26.4% of imports in the last 12 months) led by winter wear though there will likely be alternatives available from suppliers in Bangladesh (30.5%) and Indonesia (6.5%).

CHINA A PROBLEM, BUT NO SHORTAGE OF ALTERNATIVES

Chart segments U.S. seaborne shipments associated with Hennes & Mauritz by shipment origin and product (HS-4) for the 12 months to June 24, denominated in TEUs.  Source: Panjiva

PANJIVA RESEARCH is a service provided by Panjiva, Inc. ("Panjiva") to relevant global subscribers, and are deemed to be Panjiva "Services" subject to the Panjiva Terms & Conditions of Use. Information contained within or made available via the Services is for informational purposes only and nothing in the Services shall constitute or be construed as an offering of financial instruments, or as investment advice or recommendations by Panjiva, Inc. or its affiliates of an investment strategy or whether to "buy", "sell" or "hold" an investment. The Services may include views and commentary about customers of Panjiva. No aspect of the Services is based on consideration of your individual circumstances, and you should determine on your own whether you agree with the information contained within or made available via the Services. Employees involved in Panjiva Research may hold positions in securities analyzed or discussed in the Services. Panjiva does not make any express or implied warranties, representations, endorsements or conditions with respect to the Services and the information contained within or made available via the Services, including without limitation, warranties as to the usefulness, completeness, accuracy, currentness, reliability or sufficiency of any information (including, without limitation, conclusions, statements, opinions, estimates, forecasts or projections of any kind) and expressly disclaims any implied warranties. Neither this disclaimer nor any of its contents may be forwarded or redistributed without the prior written consent of Panjiva. © 2019 Panjiva, Inc. All Rights Reserved.