Inditex breaks its profit record once again. The group, which includes brands like Zara and Massimo Dutti, has earned 4.449 billion euros in the first nine months of its fiscal year (February to October), a record figure that represents an 8.5% increase compared to the same period in 2023. Each day that goes by, the company chaired by Marta Ortega earns 16.5 million euros. In addition, revenues reached 27.442 billion euros, a 7.1% increase, as reported to the National Securities Market Commission (CNMV) on Wednesday.
Despite the new record results, the company is slowing down its growth pace. The fashion sector is facing a challenging environment, and the multinational company is not immune to it, even though it continues to lead the market. Sales have grown less this year than in 2023 when they increased by double digits at 11.1%. The third quarter also shows a slowdown. Between August and October, Inditex earned 1.681 million euros, 5.8% higher than the third quarter of last year. This is the smallest year-on-year increase for a quarter since 2021. The results are below analysts' expectations, leading to a drop in stock value at the market opening. Shares were down 5.8% by mid-morning.
Good start to the fourth quarter
Regarding the last quarter of the year, Inditex indicates that the collections for the fall/winter campaign were “very well received by customers”. Sales at constant exchange rates have grown by 10.5%, “with a good performance both in-store and online and across all formats”. “We continue to operate with very satisfactory margins in all lines of the profit and loss account,” they affirm.
The multinational founded by Amancio Ortega has a presence in 214 markets, “with a low market share in each of them and in a highly fragmented sector, so we see strong growth opportunities,” they continue. Their strategy involves focusing their commercial offer in fewer but larger stores. Although they have 5,659 stores, 63 fewer than a year ago, their gross space continues to increase. The growth of this for the 2024-26 period is estimated to be around 5%.
In terms of store closures, Oysho has been the one that has concentrated the majority in the last year, with 41 closures, followed by Zara, with 36 closures, leaving its network of stores at 1,791. Pull & Bear is the only brand that has added stores, with 23 new locations. Inditex's CEO, Óscar García Maceiras, also highlighted during the call with analysts that the group will close out this 2024 with 90 Zara Man stores, the men's line of its flagship brand.
