In This Article:
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Net Sales: Increased 7.1% to EUR27.4 billion.
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Sales Growth in Custom Currency: Grew 10.5%.
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Profit Before Taxes: Increased 9.9% to EUR5.8 billion.
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Net Income: Increased 8.5% to EUR4.4 billion.
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EBITDA: Grew 7.2% to EUR8 billion.
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Gross Profit: Increased 7.2% to EUR16.3 billion.
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Gross Margin: Reached 59.4%.
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Free Cash Flow: Significant generation over the period.
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Net Cash Position: Grew 3% to EUR11.8 billion.
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Store and Online Sales Growth (Nov 1 - Dec 9): Increased 9% in constant currency.
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Inventory Levels: 3% lower than the same date in 2023.
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Store Expansion: Opened stores in 45 different markets.
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Capital Expenditure for 2024: Estimated at EUR1.8 billion.
Release Date: December 11, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Sales in custom currency grew 10.5% in the first nine months of 2024, with net sales increasing by 7.1% to EUR27.4 billion.
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Profit before taxes rose by 9.9% to EUR5.8 billion, and net income increased by 8.5% to EUR4.4 billion.
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The company generated significant free cash flow, enhancing its net cash position to EUR11.8 billion.
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Store and online sales in constant currency grew by 9% between November 1 and December 9, 2024.
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Inditex continues to expand globally, opening stores in 45 different markets and rolling out new concepts in new locations.
Negative Points
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The company faced a negative currency impact on sales due to the strength of the euro and depreciation of the Brazilian real and Mexican peso.
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Operating expenses increased, although they were managed to grow below sales growth.
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The gross margin was affected by currency fluctuations, with a potential minus 3% currency impact on sales for 2024.
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The competitive environment in the fashion industry remains challenging, impacting promotional strategies and gross margins.
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The company is facing headwinds in external sourcing, which could affect future gross margins.
Q & A Highlights
Q: Can you discuss the impact of the recent flooding in Spain on sales and logistics? A: Marcos Lopez Garcia, Director - Capital Markets, stated that the impact was very limited, with only three stores affected, which are now back in operation. There was no significant impact on sales or logistics.
Q: How is the competitive environment affecting your gross margin and sales? A: Marcos Lopez Garcia noted that sales growth in constant currency was strong at 10.5%, despite a negative currency impact due to the euro's strength. The gross margin remains stable, and costs are tightly controlled, resulting in high margins across the P&L.