Source: Company reports/FGRT

9M17 Results

Inditex, an international textile company based in Spain, reported a 9M17 revenue increase of 9.5% year over year, to €18.0 billion. EPS was €0.75, an increase of 6.2% versus the 9M16 period. The company’s gross profit margin contracted by 50 basis points year over year in the nine-month period, to 57.4%, while its SG&A margin increased by 30 basis points, to 36.1%. Inditex reported 6.1% year-over-year EBIT growth, to €3.0 billion, and the company’s 9M17 EBIT margin contracted by 50 basis points year over year, to 16.7%. Inditex’s results were underpinned by “strong” but unspecified comparable sales growth and by store and online expansion. The company opened 212 new stores in 52 markets in the 9M17 period, reaching a total of 7,504 stores in 94 markets. The majority of new store openings were under the Zara, Oysho and Zara Home banners. Online sales for Zara were launched in India in October 2017.

Outlook

For the trading period from November 1 through December 11, 2017, Inditex’s store and online sales increased by 13% year over year in constant-currency terms. The company expects to incur capital expenditures of €1.5 billion in FY17. Analysts estimate that Inditex will generate €25.6 billion in net sales in FY17, along with €4.4 billion in EBIT and EPS of €1.10. Consensus estimates imply FY17 year-over-year revenue growth of 9.8%, an EBIT margin of 17.0% and EPS growth of 8.0%.