The following is a summary of the Industria De Diseño Textil, S.A. (IDEXY) Q4 2023 Earnings Call Transcript:
Financial Performance:
Inditex reported a 10.4% sales growth to €35.9 billion in 2023, while gross margin improved to 57.8%.
Operating expenses were well managed, net income significantly increased by 30% to €5.4 billion, and they hold a robust cash position of €11.4 billion, up by 15.3%.
EBITDA increased 13.9% to €9.8 billion, and the company achieved a profit increase before tax on sales by 266 basis points to 19.1%.
The company managed a healthy gross profit of €20.8 billion, up by 11.9%, and its controlled operating expenses led to inventory decrease by 7% as compared to last year.
Their return on capital employed increased 580 basis points to 39%, store sales grew by 8% and online sales by 16%.
They announced a dividend increase of 28% to €1.54 per share, and the planned ordinary capital expenditure for 2024 is approximately €1.8 billion.
Business Progress:
Inditex demonstrated steady growth in key regions and markets, both in physical stores and online.
They continue to focus on optimizing commercial spaces, online platforms, product offerings, customer experiences, and sustainability.
A logistic expansion plan has been launched for 2024/2025 with an allocation of €900 million each year to enhance logistics capacities.
Inditex is expanding its global footprint with operations in 213 markets and planning for new stores in locations like Miami in 2024, along with exploring growth opportunities in the US and Germany.
Zara's Pre-owned platform is set to extend services to US customers next year, and their Sustainability Innovation Hub is collaborating with over 350 startups.
They follow an integrated model of stores and online for growth, with investments in logistics to grab future growth opportunities.
Progress in store optimization across all concepts includes 192 openings, 231 refurbishments, 84 enlargements, and 350 absorptions.
The firm anticipates stable gross margin and a limited currency impact of minus 1.5% on sales for 2024.
More details: INDITEX (IND.DE DISENO TEXTIL SA) UNSP ADR EACH REP 0.50 ORD IR
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