Inditex reported revenue growth of 7.1%, up to a total of €8.2bn ($8.91bn) in Q1 2024.
The Spanish company, which owns retail brands Zara, Stradivarius and Massimo Dutti, “continues to excel”, according to GlobalData apparel analyst Alice Price, thanks to its execution of the latest fashion trends and wide-ranging styles.
However, Price also noted that the revenue growth was a “marginal slowdown” compared to Q4 2023/2024, when reported revenue increased 8.7%. She attributed this to “economic challenges” weighing heavily on shoppers’ budgets.
In Q1 2024, Inditex opened stores in 28 markets, including its first store in Uzbekistan. Inditex also reopened 19 of its Ukraine stores on 3 April, taking the total number of reopened stores in the country to 48.
Inditex said it “continues to see strong growth opportunities” and plans to take its business model “to the next level”.
Key results for Inditex in Q1 2024
- Sales grew 7.1% to hit a total of €8.2bn, up 10% on a constant currency basis.
- EBITDA increased 8% to €2.4 billion
- Net income increased 10.8% to €1.3 billion
Inditex attributed its success in Q1 2024 to the creativity of its team and strong execution of its business model.
The company said “all expense lines” had made progress in Q1 2024, as operating expenses increased 6.4%, below sales growth.
Inditex added that its “robust operating performance” in Q1 2024 had led to a 3% reduction in inventory, as of 30 April 2024.
Inditex’s Massimo Dutti brand recently launched on JD.com in China, offering menswear, womenswear and accessories on the online sales platform.
What next for Inditex?
Inditex said its spring/summer collections for 2024 have been “very well received” by consumers so far and has reported a 12% increase in store and online sales between 1 May and 3 June 2024.
The company is also rolling out new security technology in its stores. The system aims to provide “a significant improvement in customer experience” and will be fully operational across Zara stores in 2024. Inditex will eventually roll out the system to its other brands too.
Thanks to the strength of future opportunities it sees, Inditex said it would be “implementing a logistics plan” in 2024 and 2025.
In a statement it said: “This extraordinary two-year investment programme focused on the expansion of the business allocates €900m per year to increase logistics capacities in each of the 2024 and 2025 financial years. These investments will have the highest standards of sustainability and use the most up-to-date technology.”
Inditex is planning to launch a weekly live-streaming service for its Zara brand in the US, Europe and UK this year due to its livestreams in China contributing to the brand selling 50% more product sizes in the first quarter of 2024 compared to last year.
GlobalData's Price noted: “Despite its popularity in Asia, live shopping remains much less prevalent in Western countries, so only time will tell as to whether it will be successful in gaining traction with shoppers in these regions.”
