Zara-owner Inditex upbeat on strong results

(Sharecast News) - Shares in Inditex sparked on Wednesday, after the Spanish fashion giant said 2024 had got off to a strong start. The owner of Zara, Pull&Bear and Bershka, among others, said its spring/summer 2024 collections had been well received by customers, with total sales in the six weeks to 11 March up 11% year-on-year between 1 February and 11 March.

The world's biggest retailer also announced plans to spend €900m a year expanding logistics capabilities in 2024 and 2025, "in view of the strong future growth opportunities".

Inditex said it had a "strong commitment to profitable growth" and expected annual gross space to grow by around 5% between 2024 and 2026.

Inditex currently has just under 5,700 stores in around 90 countries.

As at 1000 GMT, the stock had put on 5%.

The update came as Inditex posted fourth-quarter sales of €10.4bn, up 8.6% year-on-year and an improvement on the 6.6% growth seen in the previous three months. Net profits rose nearly 24% to €1.3bn, marginally ahead of expectations.

In the year to 31 January, net sales were €35.9bn, up 10% or by 14% in constant currencies. The retailer said it had seen sales growth across all geographies and concepts during the year.

Annual earnings before interest, tax, depreciation and amortisation jumped 14% to €9.9bn, while net income surged 30% to €5.4bn.

Oscar Garcia Maceiras, chief executive, said: "Inditex's performance in 2023 has been excellent. Our teams have been able to take advantage of the opportunities to keep growing profitability.

"We are investing to drive future growth and continue to offer an attractive remuneration to shareholders."

Jefferies noted: "The fourth-quarter results and current trading confirm just how much stronger than the rest of its peer group Inditex has become."

Inditex is majority-owned by the family of Amancio Ortego, its billionaire founder.