Inditex, formally known as Industria de Diseño Textil, has announced ambitious strategies aimed at bolstering its operational capabilities, improving efficiencies, and enhancing competitiveness as it heads into 2024. This announcement comes on the heels of a successful fiscal first half, characterized by notable growth in both profit and net sales. Analysts at Bernstein highlighted, "On the toughest quarter, Inditex has managed to deliver good growth and profitability." They acknowledged that the earnings of the Spanish clothing retail giant aligned with consensus estimates, with margins performing around expected levels. The renowned owner of popular brands such as Zara, Pull&Bear, Massimo Dutti, and Bershka reported a net income attributable to the controlling company of an impressive 2.77 billion euros for the half-year period that ended on July 31, marking an increase from 2.51 billion euros recorded in the previous year.
Moreover, net sales surged to 18.07 billion euros from 16.85 billion euros, driven by the positive reception of its spring/summer collections by customers both in-store and online. In addition, Inditex’s sales for the autumn/winter collection have also shown positive trends, with sales in constant currency from both physical stores and online channels demonstrating an 11% year-over-year increase in the timeframe extending from August 1 to September 8. Looking forward, Inditex has set ambitious targets to enhance sales productivity within its stores, aiming for a 5% growth in annual gross space between 2024 and 2026.
However, the company also anticipates a negative currency impact on sales estimated at 3%, alongside an ordinary capital expenditure forecast of approximately 1.8 billion euros for fiscal 2024. In line with its expansion plan for fiscal years 2024 and 2025, the company has earmarked 900 million euros annually for upgrading its logistics capabilities. Inditex remains focused on several key priorities moving forward, as articulated by executives: "Our key priorities are to continually improve the fashion proposition, enhance 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," the company emphasized. As a reflection of its positive outlook, Inditex's shares experienced a nearly 4% rise during late morning trading, reinforcing investor confidence in the company's strategic direction. Current stock price stands at $48.40, with a noteworthy change of $+2.1, translating to a percent change of +4.58%..