Inditex (ITX) Q2 2024 earnings summary

Executive summary

• Achieved robust operating performance in H1 2024, driven by creativity, integrated business model, and strong execution across all concepts and channels.

• Net income rose 10.1% to €2.8 billion, with strong cash flow generation and continued momentum into H2.

• Sales grew 7.2% to €18.1 billion, with constant currency sales up 10.2% and positive results across all concepts and regions.

• Store and online sales in constant currency grew 11% from August 1 to September 8, 2024, year-over-year.

• Spring/Summer collections were well received, supporting sales momentum.

Financial highlights

• Sales reached €18.1 billion, up 7.2% year-over-year (10.2% in constant currency).

• Gross profit rose 7.5% to €10.5 billion, with a gross margin of 58.3% (+19bps year-over-year).

• EBITDA increased 8.1% to €5 billion; PBT up 10.6% to €3.6 billion.

• Operating expenses grew 6.8%, below sales growth, reflecting tight cost control.

• Inventory as of July 31 was about 2% lower year-over-year, considered high quality.

Outlook and guidance

• Expects a -3% currency impact on sales for full year 2024.

• Gross margin guidance remains stable at ±50 basis points for the year.

• Ordinary capex for 2024 estimated at €1.8 billion, with €900 million per year for logistics expansion in 2024 and 2025.

• Annual gross space growth expected around 5% for 2024-2026.

• Focus on fashion proposition, customer experience, and sustainability to drive future growth.