H&M shares slump on Goldman Sachs downgrade to sell

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H&M Hennes & Mauritz HM.B, -5.02% shares slumped 5% as Goldman Sachs downgraded the Swedish retailer to sell from neutral and cut its price target to 160 kroner from 200 kroner. The broker blamed rising costs, including for freight, cotton and polyester. Cost of goods sold inflation could go from -6% in fiscal 2021 to +9% in fiscal 2022. Though the retailer will act to mitigate the cost pressures from supplier negotiation, sales mix and pricing, it said gross margins will contract by 140 basis points.

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