Inditex, owner of Zara among others, failed to meet analysts’ expectations in the third quarter of 2024. However, the first nine months were strong and the holiday season is a bright spot on the horizon as well.
Holiday season starts well
Both revenue and net profit fell short of forecasts in the third quarter, partly due to unfavourable exchange rates and heavy flooding in Spain. Sales were 9.36 billion euros and net profit rose 8.5% to 4.44 billion euros, but analysts were counting on slightly more. Notably, the dollar’s strength against the euro depressed results.
Nevertheless, the Spanish fashion giant continues to invest unabated: this year, Inditex anticipates 1.8 billion euros spent on larger stores and logistics centres, while it is also betting on marketing campaigns, including a collaboration with supermodel Kate Moss. The company plans to improve its logistics capabilities and is counting on a stable gross margin of around 5% until 2026.
In the first nine months of the fiscal year, sales climbed 7.1% to 27.4 billion euros, while EBITDA rose 7.2%. The year-end season also got off to a good start: between 1 November and 9 December, sales rose 9% in constant currency compared to the same period a year earlier.
