reports
- Cedric Rossi
Inditex: Still the best-in-class in the retailing industry
Inditex: (BUY, Fair Value EUR33 (+24%)) Still the best-in-class in the retailing industry Yesterday’s publication has reassured some investors who feared that ITX, as other retailers, would be eventually impacted by hot temperatures in Europe and lingering tough retail conditions. Management’s optimistic tone, highlighted by a promising H2 outlook, is justified by ITX’s lead in terms omnichannel strategy, which is well executed. We have proceeded to minor adjustments to our forecasts (FX h...
- Cedric Rossi
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 disclos...
- Cedric Rossi
- Cedric Rossi
Inditex: Top line growth is a touch lower but of a better quality
Inditex: (BUY, Fair Value EUR33 (+14%)) Top line growth is a touch lower but of a better quality Q1 sales came in at EUR5.65bn or a touch shy of CS forecasts (EUR5.82bn) because of a more harmful FX headwind whilst the FX-n growth was a bit weaker-than-expected (+7% vs. CS of +8-9%e) in a challenging fashion market. However, margins topped expectations as the GM expanded 70bp to 58.9% (CS: 57.8%e), marking a clear sequential improvement vs. Q4 (-130bp), and the EBIT margin was up 10bp to 15.1% (...
- Cedric Rossi
Inditex | BUY, EUR35 |The Leader is Fashionable Again
The stock has lost 24% since its peak level last summer due to a combination of external factors (FX, defiance vis-Ã -vis retailers etc.) and the continuous margin decline since 2012. The latter justifies our more cautious stance with regard to the normative margin level and therefore, our slight FV adjustment (EUR33 vs. EUR35) even if ITX expects most of these margin headwinds to gradually ease off this year. Buy recommendation reiterated as we remain convinced that ITX is the best choice to pl...
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