Japan PM Ishiba to announce resignation by August end – Mainichi
Investing.com -- Shares of Inditex (BME:ITX) fell more than 4% on Wednesday after the fashion retailer reported first-quarter results that missed expectations on sales and operating profit, with current trading slightly below consensus forecasts.
First-quarter sales totaled €8.3 billion, up 4.2% in constant currency, below consensus of €8.4 billion or 5.6% growth.
Like-for-like sales rose about 2%, missing the 3.5% estimate. Foreign exchange translation had a negative impact of 2.9%.
Operating profit was €1.64 billion, under the €1.66 billion consensus. Earnings per share came in at €0.42, in line with estimates, supported by higher associate income and a lower tax rate. Gross margin was flat year over year at 60.6%, matching expectations.
Sales from May 1 to June 9 rose 6% in constant currency versus a consensus estimate of 7.2%, against a strong prior-year comparison of 12%.
Inventory grew 6% year over year to €3.79 billion. Net cash stood at €10.8 billion, slightly below RBC Capital Markets’ estimate.
The company kept its full-year gross margin guidance of flat year over year within a 50 basis points range.
Capital expenditure remains set at €1.8 billion. Based on current exchange rates, the expected foreign exchange translation impact was revised to -3 percentage points, compared to -1 point in March.
Jefferies analysts said sales growth reaccelerated to 6% in the first quarter when adjusted for the leap year, despite weather disruptions in February and the loss of a trading day.
EBIT margin declined 24 basis points to 19.8% as operating expenses, including depreciation, amortization and FX, rose 2.3%, while FX-adjusted sales increased 1.5%.
RBC Capital Markets said Inditex’s sales base and operating margin have risen above long-term averages following strong post-pandemic results.
It expects more moderate growth in sales and EPS in 2025. Inditex trades at around 25 times 2025 estimated earnings, or 24 times excluding cash, with a dividend yield of about 3.5%.
Jefferies flagged gross margin stability and strong cost control amid currency headwinds and uneven seasonal trends.