INDITEX: 3Q18 results slightly below consensus (Bankinter Securities)
Inditex (Hold, target price: €24.19 / share) has just published its 3Q18 results, which came slightly below consensus: Revenues +2% to €6,412mn (vs. €6,677mn for the consensus), gross margin +4% to €3,877mn (vs. €3,973mn), EBITDA +4% to €1,588mn (vs. €1,630mn), EBIT+3% to €1,285mn (vs. €1,335mn) and net profit +5% to €1,030mn (vs. €1,045mn). Management mentions that the strategy in September was to shy away from lowering prices, a tactic that was seen in some of its competitors (H&M is again stacking up inventories). That shows in these results, with lower revenue growth but wider margins. Revenue growth at constant exchange rate stood at 7% as of 9M18 (vs. 8% as of 1H18). Currency impact was calculated as –4.3%. Net cash position increased 10% to €6.6bn, or 8% of market capitalization.
Industria de Diseno Textil Inditex is the parent company of a group engaged in apparel and footwear manufacturing and retailing. The Group is made up of fashion retail chains, textile manufacturing, purchasing and fabric treating companies, logistics and construction companies which are responsible for store refits and manufacturing structure. Products include men's, women's and children's wear collections, footwear, and women's lingerie which are sold through the Group's retail store chains of: Zara, Kiddy's Class, Pull & Bear, Massimo Dutti, Bershka, Stradivarius, and Oysho and Zara Home.
Bankinter S.A. is a Spanish brokerage firm established in 1989. The company's line of business includes the provision of market research and trading services for Equity and Fixed Income products.
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