ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. H & M Hennes & Mauritz AB's annualized return on invested capital (ROIC %) for the quarter that ended in Feb. 2026 was 3.24%.
As of today (2026-06-28), H & M Hennes & Mauritz AB's WACC % is 7.73%. H & M Hennes & Mauritz AB's ROIC % is 8.91% (calculated using TTM income statement data).
H & M Hennes & Mauritz AB generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
H & M Hennes & Mauritz AB (CHIX:HMBs) ROIC % Explanation
ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.
There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.
Why is ROIC % important?
Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, H & M Hennes & Mauritz AB's WACC % is 7.73%. H & M Hennes & Mauritz AB's ROIC % is 8.91% (calculated using TTM income statement data).
H & M Hennes & Mauritz AB generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
Be Aware
Like ROE % and ROA %, ROIC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Apparel Manufacturing subindustry, H & M Hennes & Mauritz AB's ROIC %, along with its competitors' market caps and ROIC % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
H & M Hennes & Mauritz AB ROIC % vs Manufacturing - Apparel & Accessories Industry
For the Manufacturing - Apparel & Accessories industry and Consumer Cyclical sector, H & M Hennes & Mauritz AB's ROIC % distribution charts can be found below:
* The bar in red indicates where H & M Hennes & Mauritz AB's ROIC % falls into.
Note:
The Operating Income data used here is four times the quarterly (Feb. 2026) data.
The tax rate is limited to between 0% and 100%.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
H & M Hennes & Mauritz AB (CHIX:HMBS) has a ROIC % of 3.24% as of Feb. 2026. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on H & M Hennes & Mauritz AB and its competitors.
Is H & M Hennes & Mauritz AB's ROIC % too high?
H & M Hennes & Mauritz AB's current ROIC % is 3.24%. The Manufacturing - Apparel & Accessories industry median ROIC % is 2.91. H & M Hennes & Mauritz AB's value of 3.24% is 11.5% above this industry median. Overall, H & M Hennes & Mauritz AB has a GF Score™ of 74/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does H & M Hennes & Mauritz AB's ROIC % compare to RL and LEVI?
H & M Hennes & Mauritz AB's ROIC % of 3.24% can be compared against companies in the Manufacturing - Apparel & Accessories industry. The industry median ROIC % is 2.91. H & M Hennes & Mauritz AB's value of 3.24% is 11.5% above this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROIC % for a Manufacturing - Apparel & Accessories company?
The median ROIC % among Manufacturing - Apparel & Accessories companies is 2.91, based on 1,048 companies in the industry. Companies in the top quartile (top 25%) have a ROIC % significantly above this median, while those in the bottom quartile fall well below. However, ROIC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. H & M Hennes & Mauritz AB's current ROIC % of 3.24% is 11.5% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROIC % mean?
A high ROIC % can signal that a stock is expensive relative to its fundamentals. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on H & M Hennes & Mauritz AB and its competitors. For the Manufacturing - Apparel & Accessories industry, the median ROIC % is 2.91 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. H & M Hennes & Mauritz AB's current ROIC % is 3.24%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is H & M Hennes & Mauritz AB stock overvalued right now?
Based on GuruFocus' analysis, H & M Hennes & Mauritz AB (CHIX:HMBS) is currently considered Fairly Valued. The stock's GF Value™ is kr155.07, compared to a current price of kr166.08 — trading 7.1% above its estimated fair value. The current ROIC % is 3.24% and 11.5% above the Manufacturing - Apparel & Accessories industry median of 2.91. H & M Hennes & Mauritz AB's overall GF Score™ is 74/100 with 3 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROIC % calculated?
ROIC % is calculated from a company's financial statements. For H & M Hennes & Mauritz AB (CHIX:HMBS), the current ROIC % is 3.24% as of Feb. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is H & M Hennes & Mauritz AB (CHIX:HMBS) Overvalued in 2026?
Based on GuruFocus' analysis, H & M Hennes & Mauritz AB stock appears to be overvalued.
The current stock price of kr166.08 is trading 7.1% above its estimated GF Value™ of kr155.07.
GuruFocus considers H & M Hennes & Mauritz AB to be Fairly Valued.
Key valuation signals for CHIX:HMBS:
ROIC %: 3.24%
GF Value™: kr155.07 vs. price of kr166.08 (7.1% above fair value)
Industry Position: 11.5% above the Manufacturing - Apparel & Accessories median
No single metric tells the full story. See the CHIX:HMBS stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
The H&M Group is a global multi-brand fashion conglomerate founded in 1947. Its flagship brand, H&M, generates the majority of the group's revenue, while ARKET, COS, and the secondhand platform Sellpy represent key sources of future growth. Geographically, 34% of group revenues are generated in Western Europe, followed by North and South America at 23%, and both Southern Europe and Asia, Oceania, and Africa at 13% each. The Nordic region accounts for approximately 9% of total sales.The company operates 4,101 stores (3,660 attributable to H&M brand) across 81 markets worldwide, the majority of which are leased. Online sales contributed slightly above 30% of total group revenue in financial 2025 .
74GF Score
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