With sales of 16,851 million between February and July, 13.5% more

Inditex recorded a net profit of 2,513 million euros during the first half of its 2023-2024 fiscal year (between February 1 and July 31), which represents an increase of 40.1% compared to the same period of a year before, as reported this Wednesday by the company, which once again achieved new records with its results and exceeded analysts' forecasts.

Thus, sales grew by 13.5% and reached 16,851 million euros, with a "very satisfactory" evolution both in store and online and increases in all geographical areas and in all formats, while sales to constant exchange rate grew by 16.6%.

The gross operating result (Ebitda), for its part, grew by 15.7%, up to 4,663 million euros, while the net operating result (Ebit) grew by 30.2%, up to 3,164 million euros, and the result before taxes increased by 39%, reaching 3,252 million euros.

The gross margin grew by 14.1%, to 9,801 million euros, and stood at 58.2% of sales (27 basis points compared to the first half of the previous year). In 2023, Inditex expects a stable gross margin (/-50 basis points).

In the first quarter of 2022, Inditex provisioned 216 million euros in the 'Other results' line for the estimated expenses for the 2022 financial year in the Russian Federation and Ukraine.

"The results in this semester demonstrate that the talent of our teams consolidates the improvements in the performance of the business model. The permanent commitment to creativity, product quality and customer experience, as well as the determined progress in sustainability, make up a strategy that takes our business model to a higher level," highlighted the CEO of Inditex, Oscar García Maceiras.

The company chaired by Marta Ortega has highlighted that in the first half of the year it continued its "strong operational performance", supported by the creativity of its teams and the "good execution" of its integrated store and online business model, while at the same time has stressed that the collections of the spring-summer campaign were very well received by customers.

Between February and July, Inditex undertook openings in 20 markets. At the end of the period, it operated 5,745 stores.

Likewise, the net financial position grew by 14.1% over 1H2022, up to 10,546 million euros at the end of the first half of fiscal 2023.

Due to strong operational performance during this period and the normalization of supply chain conditions, inventory was reduced by 6.9% as of July 31, 2023 compared to the same date last year.

On the other hand, the company has highlighted that all expense lines have shown a favorable evolution.

Thus, operating expenses grew by 12.5%, below the growth in sales; including all lease charges, 220 basis points below sales growth.

In line with the solid execution of the business model, Inditex has experienced strong generation of funds. Adjusted for lease payments, the flows generated grew by 35.4% and the cash generated by operations grew by 57.4%.

SECOND HALF OF 2023

Regarding the second semester, the company has highlighted that the collections of the autumn-winter campaign have been very well received by its customers.

Thus, in-store and online sales at constant exchange rates between August 1 and September 11, 2023 have grown by 14% compared to the same period in 2022.

"GREAT GROWTH OPPORTUNITIES"

Inditex has stressed that it continues to see "great opportunities for future growth", which is why in the current year it is making investments to increase operational capacity, obtain efficiencies and increase differentiation to the next level.

Specifically, it estimates ordinary investments of around 1.6 billion euros in 2023.

"Our priorities are to continually improve our fashion proposition; optimize the customer experience; increase our focus on sustainability; and preserve the talent and commitment of our people. Prioritizing these areas will drive long-term growth," he said. stressed the company, which added that "the result is a unique market positioning", which provides its business model with "great potential".

Inditex has a presence in 213 markets, with a low share in each of them and in a highly fragmented sector, which is why the group founded by Amancio Ortega sees "strong growth opportunities."

"We continue to estimate a growing increase in sales productivity in our stores. The gross growth of the space in 2023 will be around 3% and the task of optimizing the stores continues. Inditex expects that the contribution of the space to sales will be positive in 2023. We continue to experience a very positive evolution in online sales and we expect a growing share of the same in the group's total sales," said the firm, which, at current exchange rates, expects a currency impact of - 3.5% in sales in 2023.