Shares of Zara owner Industria de Diseño Textil, S.A., or Inditex (ES:ITX), fell sharply after the company’s Q3 sales missed analysts’ expectations. The company’s sales in the third quarter reached €9.36 billion, falling short of the €9.51 billion projected by analysts. Meanwhile, sales for the nine months grew 7% year-over-year to €27.4 billion compared to the 8% expected by analysts. After the results, ITX stock fell by 4.2% as of writing.
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Inditex is a Spanish retailer that operates globally in over 200 markets with brands like Zara, Pull & Bear, and Massimo Dutti.
Inditex’s Profit Rises on Strong Seasonal Sales
Although Inditex fell short of analysts’ estimates, the company reported profit growth, fueled by a recent surge in autumn and winter clothing sales. The company’s pre-tax profit rose 9.9% to €5.8 billion in the first nine months of the year.
Additionally, the company’s gross profit increased by 7.2% year-over-year, reaching €16.3 billion in the first nine months of Fiscal 2024
Inditex Expects Robust Holiday Sales Growth
Inditex reported a good start for this holiday season and expects robust sales growth ahead. The company’s store and online sales in constant currency rose 9% year-over-year during the six weeks ending December 9, including Black Friday. However, revenue growth during this period in 2023, including key Black Friday sales, was around 14%.
Moving ahead, Inditex has announced a two-year logistics expansion plan, allocating €900 million annually in 2025 and 2026 to boost capacity. The company further highlighted that it is focusing on investments to improve its capabilities and enhance its competitive edge in the market.
Is Inditex a Good Stock to Buy?
As per the consensus among analysts on TipRanks, ITX stock has been assigned a Moderate Buy rating based on seven Buy and five Hold recommendations. The Inditex share price target is €54.06, which is 4.08% above the current share price.
Year-to-date, ITX stock has gained 33%.
