Inditex with another strong quarter, especially against the competition
💵 Sales: €9.3 billion (+6.8%)
🪙 Gross margin: 61.5% (-0.2 percentage points)
💰 EBIT: 22.8% (-0.4 percentage points)
📊 Inventory growth: -2.6%
🏢 Number of stores: 5,722 → 5,659 (-1.1%)
The world's most significant fashion retail giant, the Spanish Inditex, reported another impressive set of numbers just before Christmas. Its growth continues to be strong and is particularly favourable compared to its main competitor, H&M. The Swedish company's sales decreased by 3.1%. Inditex has steadily outpaced H&M in growth over the past couple of years.
Inditex's profitability did not improve but remained very strong. This good profitability is attributed to efficient operations and online sales growth. However, the cost share of sales decreased (from 40.1% to 39.5%). Additionally, Inditex's cost share of sales is significantly lower than H&M's (45%).
According to the company, online represented 24 % of overall Inditex sales a year ago. Since then, it has grown slightly.
The company did not specify much regarding online sales growth, only that online growth is slightly faster than that of stores. The growth in online sales has also enabled Inditex to grow despite the company's store network shrinking by over 60 stores (a decrease of 1.1%).
