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The global fashion business journal

Dec 14, 201912:04pm

Inditex: analysts expect ‘solid growth’ in third quarter

The analysists expect the Spanish fashion retailer giant to end the period with revenues valued at 7.7 billion dollars (6.9 billion euros).

Dec 3, 2019 — 8:30pm
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Inditex: analysts expect a “solid growth” in the third quarter

 

 

Inditex keeps on growing. The Spanish fashion retailer giant, the world’s number one company in terms of turnover, will end the third quarter with a growth between 8% and 9%, according to Bloomberg and Citi analysists.

 

Bloomberg analysists expect the giant to end the third quarter with sales of 7.7 billion dollars (6.9 billion euros), 8.4% more. The net profit of the company is valued at 1.3 billion dollars (1.1 billion euros), 11.3% more, while the gross operating profit (ebitda) registered an increase of 39.3%, until 2.4 million dollars (2.2 million euros), according to analysists.

 

According to Citi’s report, the group, that will publish the results of the third quarter on December 11, will register a “solid growth” during the period. The company is more optimistic and expects Inditex to grow 9% in the third quarter, and close the period with a gross margin above 60%, according to Expansión.

 

 

 

 

Citi points out that Inditex’s turnover will be driven by the increase of 4.5% in like for like sales and will grow 3% from commercial surface with a positive impact of 1.5 points in foreign currencies due to the weakness of the euro in comparison to the dollar. 

 

In the stock market, Citi gives Inditex an objective price of 34.4 dollars (31 euros), compared to 30.6 dollars (27.6 euros), figure with which the company closed yesterday’s working day when it fell 2%.  Both the bank and Bloomberg advise to buy the titles of the company.

 

All in all, the analysists’ consensus expects Inditex to end the current exercise with sales of 31.1 billion dollars (28.0 billion euros), which would result in a growth of 7.2%. On the other hand, the ebitda of the company is expected to reach 8.3 billion dollars (7.4 billion euros), 36.5% more, while net profits would increase 10.5%, until 4.2 billion dollars (3.8 billion euros).

 

Credit Suisse has set the objective price of the fashion retailer between 22 and 23 euros. Inditex’s current market price is 17.8% above the objective set by Credit Suisse. According to the bank, Inditex is overestimated due to the constant pressure of margins and growth’s deceleration.

 

Inditex ended the first semester of the exercise with sales of 14.2 billion dollars (12.8 billion euros) and an increase of 7%. The net profits account for 1.5 billion euros, 10% more.

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