Boohoo, Asos shares in focus as H&M, Inditex earnings disappoint

British fast fashion companies will be in the spotlight after the relatively weak financial results by H&M and Inditex, the parent company of Zara and Pull&Bear. Boohoo (LON: BOO) share price jumped by over 8% on Thursday after the company completed a coup at Revolution Beauty. Asos stock has remained in a tight range at 400p, 60% below the YTD high.

H&M, one of the biggest fast fashion company in the world, reported weak financial results as demand waned. Its total sales in the fourth quarter came in at SEK 62 billion as it exited the Russian and Belarus markets. For the year, net sales rose by 6% to SEK 236 billion.

These results mean that the company’s business is slowing down. Most importantly, H&M is still struggling with a huge increase in inventories accumulated during the pandemic. Nonetheless, its stock has jumped by over 50% this year as it works on a turnaround.

H&M is not the only struggling fast fashion company that is struggling. Inditex, the Italian giant, said that its revenue rose by 7% last quarter, the slowest growth rate in about three years. Still, Inditex stock has risen by over 97% from its lowest level in 2022.

British fast fashion brands like Asos and Boohoo are also going through a prolonged winter that has cost investors billions of pounds. They are also some of the most heavily shorted companies in London. 

Boohoo vs Asos stocks

Boohoo share price has already collapsed by more than 80% from its all-time high, bringing its market cap to 516 million pounds. At its peak, the company was valued at over 6.6 billion pounds. It has also seen its total revenues slow and losses intensify.

Boohoo’s management is now working on a turnaround strategy, which is aimed at restarting growth and boosting profits.

The story has been the same at Asos, whose stock has plunged by more than 95% from its highest point in 2018. It is now hovering at its all-time low as the management attempts to engineer a turnaround.

Asos has boosted its balance sheet by raising cash from investors, reduced its inventories, and invested in technology to boost its logistics. Still, it is still too early to predict whether these measures will help turn around the company.