Zara owner Inditex misses expectations despite 7% surge in revenues

Inditex, the owner of fashion brands Zara, Stradivarius and Berksha, has seen its shares slide 6% in trading after its performance in the first nine months of the year came in below analysts expectations. Inditex reported revenues for the period of €27.4bn (£22.6bn) up 7.1% YOY and revealed that sales in constant currency grew 10.5% after its autumn/winter collections were “very well received”. Its EBITDA increased 7.2% to €8bn (£6.59bn) and the fashion retailer also saw pre-tax profits jump 9.9% to €5.8bn (£4.8bn). During the period Inditex said that openings have been carried out in 45 markets and by its end Inditex operated 5,659 stores across the world. Looking ahead, Inditex said: “[It] continues to see strong growth opportunities. Our key priorities are to continually improve the fashion proposition, to enhance the customer experience, to increase our focus on sustainability and to preserve the talent and commitment of our people. Prioritising these areas will drive long-term growth. To take our business model to the next level and extend our differentiation further we are developing several initiatives in all key areas for the coming years. “The creativity of our teams and the flexibility of the business model in conjunction with in- season proximity sourcing allows a swift reaction to customer demand. This situation results in a unique market position which provides our business model with great growth potential.” It added: “Inditex operates in 214 markets with low share in a highly fragmented sector and we see strong growth opportunities. We expect increased sales productivity in our stores going forward. The growth of annual gross space in the period 2024-2026 is expected to be around 5%. Inditex expects space contribution to sales to be positive in this period, in conjunction with a strong evolution of online sales. Optimisation of stores is ongoing. “At current exchange rates, Inditex reiterates its expectation of -3.0% currency impact on sales in 2024.”