RBC cuts H&M and JD Sports forecasts on German consumer weakness

Analyst

โดย Proactive·

Summary · why it matters

RBC Capital Markets has cut profit forecasts for H&M and JD Sports Fashion PLC, citing sluggish consumer demand in Germany as a growing risk for European retailers. The bank lowered its earnings per share forecasts for H&M by 2% to 3% for the 2026 and 2027 financial years, citing lower like-for-like sales assumptions and higher operating costs, and reduced its price target to SEK175 from an unspecified previous level while maintaining a sector perform rating. For JD Sports, RBC cut earnings forecasts for the 2027 and 2028 financial years by 6% and lowered its price target to 95 pence from 100 pence, after the retailer reported softer-than-expected second-quarter trading driven by slower US footwear sales. RBC noted that store sales in German fashion retail have fallen almost 4% year to date while online sales have risen 4% year on year, a trend it expects to continue given Germany's e-commerce penetration lags other major markets. The bank said Next and Zalando are best placed to benefit from the online shift, while Action and H&M carry more exposure to German stores, and JD Sports plans to close about 40% of its roughly 100 German stores as parts of the market appear to favour single-brand retailers over multi-brand stores.