Inditex sales hit all-time high in fourth quarter
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Inditex sales hit all-time high in fourth quarter

Spanish fast-fashion titan Inditex reported sales for the fourth quarter, and full year, of 2018 last week. The company said it’s making strong headway with its push into better digital operations, and its US presence has continued to grow, more-than tripling in size over the last decade. With all metrics showing positive evolution, and sales hitting an all-time high, Inditex looks to be justifying its share price’s trajectory so far this year

Inditex’s share price has appreciated by 18% in the first three and a half months of 2019

21 03 inditex

Source: Yahoo Finance

For the full year, Inditex said sales increased by 3% against the previous year to an all-time high of 26.1 billion euros. Like for like sales over the same period came in slightly higher at 4%, and online sales soared, showing a 27% increase. Both of these figures are reported on a year on year basis. Earnings before interest, tax, depreciation and amortisation likewise saw strong growth, coming in 11% higher in local currencies, once more on a year on year basis. Gross margin improved by 39 basis points over the period.

Inditex’s expansion plans are showing good signs of success. As well as the huge uptick in online sales (and Inditex is aiming to keep that trajectory going in digital), the company’s flagship brand, Zara, is now active in 202 markets. Also impressive is the slow-burning but consistent increase in US stores. Inditex has driven its numbers up over the previous decade and is finally large enough in America to gain some momentum.

Inditex’s number of stores has risen consistently for over a decade – now more than 100

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Source: MDS

Inditex’s chairman and CEO, Pablo Isla, made the following comment over the results: “Our investments in both logistics and stores in order to leverage the integrated platform, as well as our continued focus on prime locations, has enabled Inditex to offer customers a consistent and appealing proposition globally, across all our brands and channels”.

Disclosure

Dominion holds Inditex in its Global Trends Luxury Fund.


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