Jefferies | ITX’s 5% Q4 EBIT beat confirmed the compounding power of the group’s affordable quality fashion proposition. Of course, it will be the clear miss in current trading at a 4% gain (versus we think buy-side at 7%/8%) which will set the debate this morning. The acceleration to 7% last week (as weather turned more seasonal) suggests that meteorological conditions were especially difficult during a small part of Q1 (and by extension the coming year). Call at 8AM UK time.
Detail
A 5% Q4 beat from ITX…
ITX today reports Q4 (Nov-Jan) sales/EBIT/EPS of €11.21bn/€1.88bn/€0.46 vs cons of €11.14bn/€1.79bn/€0.45. In addition:
Ex-fx sales growth came in at +10.5% for Q4, vs cons of +9.9% and after +9% for the period from 1 Nov to 9 Dec;
The FY fx impact of -300bps is vs guidance of -300bps and cons at -210bps:
Q4 gm was +22bps YoY (cons +5bps), with EBIT margin of +114bps YoY (cons +41bps) confirming opex growth lagging progress in sales;
Closing net cash ex IFRS16 of €11.5bn (+€89m YoY) despite exceptional levels of investment in the supply chain (of €1.8bn across 24/25 and 25/26), allowing for a total DPS of €1.68 (cons €1.65).
…current trading a clear miss
as the release notes:
Current trading from 1 Feb to 10 Mar of +4% ex fx vs cons for Q1 in its entirety at +8.8% (and vs +8.9% for FY 25/26), with the past week at +7%;
FX guidance for the year ahead of c.-1% (vs cons of -0.1%), likely reflecting the recent rally in the €;
Gross margin is expected to be flat (within -50bps to +50bps) vs cons at +2bps;
Investors will be keen to hear more on the weak start to 25/26 and whether ITX is confident it can continue to grow revenues ahead of opex (cons EBIT margin for 25/26).
