Inditex disappoints in third quarter

Fast-fashion giant Inditex failed to meet analysts’ expectations in the third quarter of 2024. The Spanish Zara owner remains optimistic, as its first six months were strong and the holiday season started brightly as well.

Holiday season starts well

Both revenue and net profit fell short of forecasts in the third quarter, partly due to unfavourable exchange rates and heavy flooding in Spain. Sales were 9.36 billion euros and net profit rose 8.5 % to 4.44 billion euros, but analysts were counting on slightly more. Notably, the dollar’s strength against the euro depressed results.

Nevertheless, the Spanish fashion giant continues to invest unabated: this year, Inditex anticipates to spend 1.8 billion euros on larger stores and logistics centres, while it is also betting on marketing campaigns, including a collaboration with supermodel Kate Moss. The company plans to improve its logistics capabilities and is counting on a stable gross margin of around 5 % until 2026.

In the first nine months of the fiscal year, sales climbed 7.1 % to 27.4 billion euros, while EBITDA rose 7.2 %. The year-end season also got off to a good start: between 1 November and 9 December, sales rose 9 % in constant currency compared to the same period a year earlier.