Sales grew by 11.1%, to exceed 25.6 billion, with an increase of 6.7% in the third quarter
Inditex recorded a net profit of 4,102 million euros during the first nine months of its 2023-2024 fiscal year (between February 1 and October 31), which represents an increase of 32.5% compared to a year before. , as reported this Wednesday by the company.
The group’s sales amounted to 25,609 million euros, 11.1% more, with a “very satisfactory” evolution both in store and online, positive in all geographical areas and in all formats. In the third quarter they stood at 8,758 million euros, 6.7% more than a year ago, after a streak of ten consecutive quarters with double-digit increases.
Sales at constant exchange rates grew by 14.9% after the collections of the autumn-winter campaign were “very well received” by customers.
Likewise, the gross margin increased by 12.3%, to 15,203 million euros, and stood at 59.4% of sales (67 basis points compared to a year before).
The company has highlighted that all expense lines have evolved favorably.
Operating expenses grew 10.6%, below sales growth, and include all lease charges, 130 basis points below sales growth.
“The execution of the business model has been very outstanding. Additionally, the autumn-winter 2023 campaign has experienced a normalization of the supply chain conditions and a more favorable euro-dollar exchange rate compared to the same 2022 campaign,” the company has explained.
Likewise, the operating result (Ebitda) increased by 13.9%, to 7,429 million euros, while the net operating result (Ebit) grew by 24.3%, reaching 5,192 million euros, and the profit before taxes by 29.8%, reaching 5,238 million euros.
In the first nine months of fiscal year 2022, Inditex provisioned 231 million euros in the ‘Other Results’ line for the estimated expenses for fiscal year 2022 in the Russian Federation and Ukraine.
Net cash has increased by 15% compared to a year before, reaching 11,480 million euros.
“In the first nine months of its fiscal year, Inditex continued its strong operational performance, supported by the creativity of its teams and the good execution of the integrated store and online business model,” highlighted the firm, which in this period has made openings in 36 markets. At the end of the period, Inditex operated 5,722 stores.
Due to strong operational performance during the first nine months of fiscal 2023 and normalization in supply chain conditions, inventory was reduced 5% as of October 31, 2023 compared to the same date last year.
FORECASTS
Regarding the beginning of the fourth quarter of fiscal year 2023, Inditex has highlighted that the collections of the autumn-winter campaign have been “very well received” by its customers.
Thus, in-store and online sales at a constant exchange rate between November 1 and December 11, 2023 have grown by 14% compared to the same period in 2022.
In this context, Inditex has stressed that it continues to see great opportunities for future growth.
“Our priorities are to continually improve our fashion proposition; optimize the customer experience; increase our focus on sustainability; and preserve the talent and commitment of our people. Prioritizing these areas will drive long-term growth,” he said. indicated.
Inditex has a presence in 213 markets, with a low share in each of them and in a highly fragmented sector, which is why it sees “strong growth opportunities.”
“We continue to estimate a growing increase in sales productivity in our stores. The gross growth of the space in 2023 will be around 3% and the task of optimizing the stores continues,” said the firm, which expects that the contribution of space for sale is positive in 2023.
Likewise, the company continues to experience a “very positive” evolution in online sales and expects a growing participation of the same in the group’s total sales.
At current exchange rates, we expect a currency impact of -4% on sales in 2023. Based on current information, in fiscal 2023 Inditex expects a gross margin around 75 basis points higher than in 2022.
In the current financial year, investments are being made to increase operational capacity, obtain efficiencies and increase differentiation to a higher level. The company estimates ordinary investments of around €1.6 billion in 2023.
