DIpil Das
[caption id="attachment_96500" align="aligncenter" width="700"]
Source: Company reports/Coresight Research[/caption]
1H19 Results
Inditex reported 1H19 revenues of €12.8 billion, even with the consensus estimate of €12.8 billion and up 6.6% from the year-ago period. The company reported earnings per share (EPS) of €0.50, up 8.7% from the year-ago period of €0.46, and lower than the consensus estimate of $0.51.
Management reported comparable store sales increased 5.0% in the first quarter and were positive across all brands and geographies, in stores and online.
The company reported store and online sales grew 8.0% from August 1 to September 8 in constant currency.
Operating expense growth would have been a 6% increase without the impact of leases under IFRS16 in the first half of the year.
The company continued to roll out its global, integrated store and online platform expansion in the first half of 2019, opening stores in 31 markets. Zara represents approximately 70% of group sales. The company reported that Stradivarius, its urban fashion brand geared to women aged 18 to 35, has performed very well so far this year.
As of the end of July, the company had 7,420 stores in 96 markets. During the first half of the year, the company introduced its online platform in Brazil, the United Arab Emirates, Lebanon, Egypt, Morocco, Indonesia, Serbia and Israel. During the third quarter, the company is due to launch its platform in South Africa, Ukraine, Colombia and the Philippines.
The table below shows Inditex’s store portfolio as of the end of July 2019.
[caption id="attachment_96472" align="aligncenter" width="700"]
Source: Company reports[/caption]
During the first half of the year, the company saw sales of garments featuring its Join Life Label, which uses sustainable production techniques and fabrics, increased to 136 million items - as many as sold during the previous 12 months. By the end of 2019, 20% of Zara’s garments will feature the Join Life Label of sustainable production. Products bearing the label are expected to grow 110% for the year and by 2020 will represent 25% of all clothing sold by Inditex. Next year, Inditex will fully eliminate plastic bags from all its stores. Zara, Zara Home, Massimo Dutti and Uterque have already eliminated them.
The company launched the TRFXJoin Life denim clothing collection made from recycled denim. This is Zara’s first post-consumer denim collection, and is part of the company’s sustainability initiatives. The stores recover clothing (from using containers placed in stores where consumers can place used clothing) and the retailer then upcycles the items.
During the first half of the year, Uterque, the company’s premium accessory store, teamed up with Bobbi Brown to create a limited-edition product range of five of the company’s best-selling products.
Outlook
Management reiterated its comparable sales growth projection of 4-6% for FY19.
Source: Company reports/Coresight Research[/caption]
1H19 Results
Inditex reported 1H19 revenues of €12.8 billion, even with the consensus estimate of €12.8 billion and up 6.6% from the year-ago period. The company reported earnings per share (EPS) of €0.50, up 8.7% from the year-ago period of €0.46, and lower than the consensus estimate of $0.51.
Management reported comparable store sales increased 5.0% in the first quarter and were positive across all brands and geographies, in stores and online.
The company reported store and online sales grew 8.0% from August 1 to September 8 in constant currency.
Operating expense growth would have been a 6% increase without the impact of leases under IFRS16 in the first half of the year.
The company continued to roll out its global, integrated store and online platform expansion in the first half of 2019, opening stores in 31 markets. Zara represents approximately 70% of group sales. The company reported that Stradivarius, its urban fashion brand geared to women aged 18 to 35, has performed very well so far this year.
As of the end of July, the company had 7,420 stores in 96 markets. During the first half of the year, the company introduced its online platform in Brazil, the United Arab Emirates, Lebanon, Egypt, Morocco, Indonesia, Serbia and Israel. During the third quarter, the company is due to launch its platform in South Africa, Ukraine, Colombia and the Philippines.
The table below shows Inditex’s store portfolio as of the end of July 2019.
[caption id="attachment_96472" align="aligncenter" width="700"] Source: Company reports[/caption]
During the first half of the year, the company saw sales of garments featuring its Join Life Label, which uses sustainable production techniques and fabrics, increased to 136 million items - as many as sold during the previous 12 months. By the end of 2019, 20% of Zara’s garments will feature the Join Life Label of sustainable production. Products bearing the label are expected to grow 110% for the year and by 2020 will represent 25% of all clothing sold by Inditex. Next year, Inditex will fully eliminate plastic bags from all its stores. Zara, Zara Home, Massimo Dutti and Uterque have already eliminated them.
The company launched the TRFXJoin Life denim clothing collection made from recycled denim. This is Zara’s first post-consumer denim collection, and is part of the company’s sustainability initiatives. The stores recover clothing (from using containers placed in stores where consumers can place used clothing) and the retailer then upcycles the items.
During the first half of the year, Uterque, the company’s premium accessory store, teamed up with Bobbi Brown to create a limited-edition product range of five of the company’s best-selling products.
Outlook
Management reiterated its comparable sales growth projection of 4-6% for FY19.