Inditex, which owns the Zara, Massimo Dutti and Bershka brands attributed an increase in sales and profits during the first half (H1) to its spring/summer collections being “well received” and a “strong execution of the fully integrated store and online business model”.
Óscar García Maceiras, CEO, said: “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 solidity of these results. Our fully integrated model continues to generate opportunities for profitable growth across all concepts, regions and channels."
Inditex H1 numbers in brief & outlook
- Sales grew 7.2%, to reach €18.1bn.
- EBITDA increased 8.1% to €5bn
- Net income increased 10.1% to €2.8bn.
Outlook
Inditex says it continues to see strong growth opportunities. Among its priorities are to continually improve the fashion proposition, to enhance the customer experience, to increase focus on sustainability and to preserve the talent and commitment of its workforce.
“Prioritising these areas will drive long-term growth. To take our business model to the next level and extend our differentiation further we are developing several initiatives in all key areas for the coming years,” it said.
Inditex adds it expects increased sales productivity in its stores going forward and increased store space to have a positive impact on sales.
At current exchange rates Inditex warns of a 3% negative impact on sales in 2024.
The Spanish retailer says it is investing during the year to scale capabilities, generate efficiencies and increase is competitive differentiation. It estimates capex of around €1.8bn.
In view of the strong future growth opportunities, Inditex is implementing a logistics expansion plan in 2024 and 2025. This extraordinary two-year investment programme focused on the expansion of the business allocates €900 million 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.
What the analysts say
Chloe Collins, head of apparel at GlobalData, noted: “Inditex continues to weather the macroeconomic storm hitting the global apparel market… Performance in Q2 remained steady on Q1 despite weak summer weather in many of its key markets such as Spain and the UK. Inditex’s local supply chain, which allows it to be more reactive, will have aided it in this situation, along with the strong fashion credentials of its brands.
“H2 has got off to a promising start, with constant currency growth between 1 August and 8 September up 11%, so Inditex can be reassured that it will gain further market share this year.
“Inditex continues its store optimisation, championing a blended omnichannel experience by integrating digital features such as self-checkouts, automated online collection points and its Store Mode on the Zara mobile app. It has also been opening more locations featuring its new design concept created by its Architectural Studio, including its second-largest Zara store which opened in Lisbon in September 2024, hosting a Portuguese pastry shop and a children’s play area. Though Inditex has been closing underperforming locations, taking its global store count down from 5,745 to 5,667 in H1 FY2024/25, it expects 5% growth in annual gross space between 2024 and 2026, proving that it will continue to expand in markets and locations that present opportunity. It is also planning to roll out Zara live streaming following a successful launch in China, and Zara Pre-Owned is due to launch in the US in October 2024.”
Yesterday Galy Co, a climate tech co pioneering the development of a "first-of-its-kind" sustainable agriculture product, closed an oversubscribed $33 million Series B financing aimed at advancing its lab-grown cotton product to pre-industrial scale and that was backed by H&M and Inditex.
