Mar 9, 2016
2 min

INDITEX (BME: ITX) FY15 Results: International Expansion and Growing Comps Underpin Results

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FY15 ended January 31, 2016; FY14 ended January 31, 2015. Source: Company reports

FY15 RESULTS

Inditex, an international textile company based in Spain, reported a FY15 revenue increase of 15.4%, to €20.9 billion, slightly above the consensus estimate. Net income increased by 14.9%, to €2.9 billion, slightly below consensus. EPS was €0.92, an increase of 14.9% versus FY14 and slightly below consensus of €0.93. Inditex reported growth of 14.5% in EBITDA, to €4.7 billion, slightly below the consensus estimate. EBIT was up 14.9%, to €3.7 billion, just below the consensus estimate. Inditex’s results were underpinned by favorable comps and by store and online expansion. Comps grew by 8.5% in FY15, faster than in FY14, when they grew by 5%. The company opened a net 330 stores in 56 markets during the period, reaching a total of 7,013 stores in 88 markets. The company launched transactional websites in Hong Kong, Taiwan, Macao and Australia, resulting in a total of 29 markets being served with e-commerce operations as of the end of the reporting period. In FY15, the company invested €1.5 billion in capex to support the modernization of its existing operations and international expansion.

SALES BY CONCEPT

Among Inditex’s concepts, Zara—which makes up 65% of total group sales—grew revenues by 17.5%, to €13.6 billion, during FY15. Zara Home was the fastest-growing concept, with sales up 21.5%, to €666.0 million. The home textile retailer opened its first stores in Switzerland, Australia and Chile during the fiscal year. All other Inditex concepts recorded double-digit sales growth, with the exception of Massimo Dutti, which grew sales by 6.0%, to €1.5 billion, and Oysho, which grew sales by 8.7%, to €452 million.

GUIDANCE

In FY16, Inditex aims to continue expanding revenue and profitability organically. The group announced €1.5 billion in capex for the fiscal year to support its expansion. During the period, the group expects to open 400–460 new stores and to expand internationally into five new markets: Vietnam, New Zealand, Paraguay, Aruba and Nicaragua. The company also anticipates that all concepts in Europe and Turkey will have e-commerce operations by the end of the fiscal year. Analysts estimate that Inditex will generate €22.9 billion in net sales in FY16, along with €4.1 billion in EBIT and €3.2 million in net income.

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