Inditex: Reassuring Q2 numbers and H2 outlook
Inditex: (BUY, Fair Value EUR33 (+29%))Reassuring Q2 numbers and H2 outlook
ITX released this morning Q2 sales up 4% to EUR6.4bn (CS: EUR6.4bn), representing a ~9% FX-n growth and an implied LFL of 4-4.5% (H1: +4%). In our view this performance is reassuring enough as it remains roughly in line with Q1 trends despite the very hot weather across Europe which has affected numerous retailers. FX tailwind on GM was less obvious in Q2 (flat at 54.8% vs. +70bp in Q1). Even though ITX does not disclose its traditional trading update (Aug to mid-Sep), the Group guides for H2 on a +4-6% LFL (CS is in the lower end of the range) and a GM up 50bp (CS: +30bp). Conference call today at 9.00am (CET).
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.
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