Inditex earned 2,768 million euros in the first half of its fiscal year ending July 31, an increase of 10.1% compared to the same period in 2023. At the same time, its sales increased by 7.2% and reached 18,065 million euros. These are record figures for the first half, but they reflect revenue growth at a slower pace than in previous quarters. Despite this, investors reacted positively, as Inditex shares rose almost 4% after the results were presented.
In these six months, Inditex’s gross operating profit (EBITDA) increased by 8.1%, to 5,040 million euros, while the gross margin, the difference between what it earns and what it spends, increased by 7.5%, to 10,541 million euros and stands at 58.3% of sales, 19 basis points above the first half of the previous year.
“The design and quality of our fashion proposition and the experience we offer our customers are, together with the efficiency and increasing sustainability of our operations, the keys to the strength of these results. Our fully integrated model continues to generate profitable growth opportunities in all concepts, regions and channels,” highlighted Inditex CEO Oscar García Maceiras.
It grows more in autumn
The company also highlighted that the autumn/winter campaign collections have been “very well received” by its customers. Specifically, in-store and online sales at constant exchange rates, between August 1 and September 8, are up 11% compared to the same period in 2023.
In the first half of the year, the company opened 34 markets and at the end of the period, Inditex operated 5,667 stores.
Inditex assures in its presentation to the market that it continues to see “great growth opportunities” and, in this sense, has indicated that its priorities are “the continuous improvement of its fashion proposition; optimizing the customer experience; progress in sustainability; and preserving the talent and commitment of its employees. “Maintaining these priorities will drive long-term growth.”
Inditex is present in 214 markets, with a small share in each of them, he said, and in a very fragmented sector, which is why the company sees “strong growth opportunities”.
Inditex forecasts that the growth of annual gross space over the period 2024-2026 will be around 5%, while estimating a positive contribution of space to annual sales over this period, in conjunction with a “strong” evolution of “online” sales.
“The store optimization process is an ongoing work,” added the company, which at current exchange rates expects a currency impact of -3.0% on sales in 2024 and a stable gross margin (around 50 basis points) this year.
During the current year, the company is making investments to increase its operational capacity, achieve efficiency gains and increase differentiation to a higher level, objectives to which it plans to allocate approximately 1.8 billion euros in 2024. This extraordinary two-year investment program has focused on the expansion of the company, allocating 900 million euros to increase logistics capacity in each of the years 2024 and 2025.
