Inditex Sells 9% More Than In H1 2019


Link Securities | Inditex (ITX) has presented its results for the first half of its fiscal year (H1 2021), which runs from February to July, achieving record sales, EBITDA and profits.

Revenues came in at €11.936 billion, 49% higher than in H1 2020, and in line (-0.3%) with the figure expected by FactSet’s analysts’ consensus. At constant exchange rates revenues grew by 53%. Online sales at constant exchange rates rose by 36% compared to H1 2020 and by 137% compared to H1 2019. ITX expects online sales to exceed 25% of total sales this year.

Gross margin was €6.907 billion in H1’21, 53% higher than in H1’20, representing 57.9% of sales (+170 b.p.). Based on available information, ITX expects a gross margin of around 57.5% (+/-50 b.p.) by 2021.

In H1’21, EBITDA grew 109% to EUR3.101 billion, 0.5% lower than FactSet’s consensus expected reading, and EBIT reached EUR1.685 billion (which compares favourably with a loss of EUR198 million in H1’20), 4% lower than the consensus expected reading. In terms of sales, the EBITDA margin reached 14.1%, compared to the 14.7% expected by the consensus.

Net profit for H1’21 stood at €1.272 billion (-195 million in H1’20), a figure that was also below (-4.1%) the FactSet consensus forecast.

In H1’21 there were openings in 27 markets. At the end of the period ITX had 6,654 shops. Shop and online sales at constant exchange rates between 1 August and 9 September 2021 grew 22% compared to the same period of 2020 and 9% compared to the same period of 2019.

Q2 2021 sales, EBITDA and net profit reached an all-time high. During Q2’21
sales growth at constant exchange rates progressively accelerated to 51% vs Q2’20 and 7% vs Q2’19.

Net financial position improved by 24% to €8.023 billion. The final dividend for 2020 (€0.35 gross per share) will be paid on 2 November 2021.

Investments in the period 2020-2022 will be around €900 million annually. The investment plan includes a digital investment of €1 billion over the 3 years.

About the Author

Juan José Fernandez-Figares
Head of Research at Link Securities, Juan José Fernández-Figares has been analysing financial markets and companies from a wide range of sectors for over two decades. He also advises clients on their investments. For the last ten years Fernandez-Figares has been developing models based on algorithms, oriented towards stock picking for portfolio and fund management.