Inditex (ITX) Q1 2024 earnings summary

Executive summary

• Achieved robust operating performance in 1Q2024, driven by creativity, integrated business model, and strong execution.

• Spring/Summer collections were well received, supporting sales growth and customer engagement in both stores and online channels.

• Store and online sales in constant currency grew 12% between May 1 and June 3, 2024, indicating strong momentum into 2Q2024.

• Continued global expansion with store openings in 28 markets, including first entry into Uzbekistan and resumption of operations in Ukraine.

Financial highlights

• Net sales rose 7.1% year-over-year to €8.2 billion; constant currency sales up 10.6%.

• Net income climbed 10.8% to €1.3 billion compared to Q1 2023.

• EBITDA grew 8% to €2.4 billion; EBIT up 10.3% to €1.6 billion.

• Gross profit increased 7.3% to €4.9 billion; gross margin reached 60.6% (+13 bps year-over-year).

• Operating expenses rose 6.4%, below sales growth, reflecting tight cost control.

Outlook and guidance

• Expects stable gross margin for FY2024 (within ±50 basis points); anticipates -2.0% currency impact on sales.

• Projecting annual gross space growth of around 5% from 2024 to 2026, with positive space contribution to sales.

• Ordinary capital expenditure for 2024 estimated at €1.8 billion, focused on commercial space optimization and online platform improvements.

• Logistics expansion plan allocates €900 million per year for 2024 and 2025.