82 522
Fashion Jobs
HENKEL
Material Handler
Permanent · BAY POINT
HENKEL
Director, Business Development
Permanent · ROCKY HILL
HENKEL
Quality Manager
Permanent · LAGRANGE
HENKEL
Market Segment Manager Defense & Space
Permanent · ROCKY HILL
HENKEL
Global Key Account Manager - Consumer Device Southern California
Permanent · IRVINE
SACK OFF 5TH
Asset Protection Uniform Guard
Permanent · PARAMUS
SACK OFF 5TH
Asset Protection Investigator
Permanent · SHREWSBURY
SACK OFF 5TH
Fulfillment Associate Part-Time
Permanent · LAWRENCEVILLE
NGG
Sales Supervisor
Permanent · NEW YORK
COTY
Assistant Marketing Manager, us Luxury - Burberry Makeup
Permanent · NEW YORK
NORTH CAROLINA STATE
Enterprise Research Administration Training Manager
Permanent · RALEIGH
NORTH CAROLINA STATE
Academic Coordinator
Permanent · RALEIGH
CENTRIC BRANDS
(Assistant) Manager, Logistics (Origin Carriers)
Permanent · NEW YORK
CENTRIC BRANDS
Keyholder, Robert Graham - Scottsdale
Permanent · SCOTTSDALE
CENTRIC BRANDS
Keyholder, Robert Graham - Las Vegas (Forum Shops)
Permanent · LAS VEGAS
MICHAEL KORS
PT Sales Supervisor, Walt Whitman Shops Huntington Station NY 11746
Permanent · HUNTINGTON
JCREW
Associate Manager
Permanent · CHARLOTTE
RAG & BONE
Account Executive
Permanent · NEW YORK
RAG & BONE
Senior Coordinator, Retail Marketing
Permanent · NEW YORK
MACY'S
Manager, Asset Protection
Permanent · FRIENDSWOOD
MACY'S
Asset Protection Detective, Southlake Mall - Part Time
Permanent · CLAYTON
MACY'S
Asset Protection Detective - Multi-Store, South Shore Plaza - Full Time
Permanent · BRAINTREE
Translated by
Barbara Santamaria
Published
Apr 8, 2019
Reading time
3 minutes
Download
Download the article
Print
Text size

Inditex shows further signs of a slowdown in Spain

Translated by
Barbara Santamaria
Published
Apr 8, 2019

Has fashion giant Inditex reached its full growth potential? After seeing revenues grow 3% to a record high of €26.14 billion in the last financial year, the company seems well placed for further growth. But a cloud of doubt hangs over the retailer, as revenues grew just 3% to €4.55 billion in Spain, marking four consecutive years of slowing revenue growth in its home market.


Pablo Isla talks with journalists at the group's headquarters in Arteixo - Inditex


“We still have growth potential,” Pablo Isla, group CEO, said during the presentation of the firm’s annual results at its head office in Arteixo La Coruña in March. “The company is more alive than ever from a business point of view.” But his upbeat tone masked the reality of the company’s performance. In 2018, the company founded by Amancio Ortega delivered the slowest sales growth in its history. Gross profit grew by 4% to €14.8 billion, while the gross margin was up by 39 basis points to 56.7%. Additionally, like-for-like sales experienced growth across both online and physical retail channels, and across all regions and brands, representing a 4% increase.

The latest results, filed with Spain’s National Securities Market Commission (CNMV), confirm Inditex’s slowdown in its domestic market. There, growth has been lagging since 2015. In fact, sales grew by just 3% to €4.55 billion in Spain in 2018, which shows a further sign of weakness when compared with the group’s 4% increase in 2017 and 6.2% in 2016. The results came after the group reported record results in financial year 2015, when group sales grew 8% in Spain and hit the €4 billion mark. And as underlined by Isla at the press conference, the company now makes €1 billion more than in 2014.

On a global scale, Inditex said revenue growth remained stable at 3.1% to  €21.58 billion. The European Union accounted for €9.94 billion, while other international markets generated the remaining €11.64 billion. Currently, the Spanish company makes the bulk of its sales in the European Union (accounting for 45.1% of total sales), followed by Asia (23.2% of sales), Spain (16.2% of sales) and the Americas (15.5% of sales).


The group's sales have continued to grow since 2013 - Inditex


ANALYSTS INCREASINGLY PESSIMISTIC DESPITE TURNOVER GROWTH

“2018 has been a key year in the transformation of all aspects of the company,” the chief executive said. “[And despite undertaking] these efforts, we have managed to post a good set of results,” he added. But the company, hit by currency effects, saw its share price fall 4.5% on the stock market on the day of the presentation. And whilst its share price quickly recovered during the same week, and its market capitalisation rose to €82.871 billion, financial analysts remain cautious about the company’s prospects. Yet Inditex continues to be Spain’s most valuable listed company.

Stocks analysts at most brokerage firms shared a negative stance in a context where high dividends and strong growth forecasts rule. The most categorical was Morgan Stanley, saying that Inditex’s capacity for growth has reached its point of maturity and that it should no longer be considered a high-growth business. Meanwhile, Credit Suisse warned over a lack of margin progress and Berenberg forecasted a slowdown in sales growth on a global scale. The Spanish company reassured investors by offered a more generous dividend policy given the “strength of the results and the resulting liquidity.” The new policy will see the company increase ordinary payout to 60% from 50%, while a total bonus dividend of €1 per share will be paid out in relation to fiscal years 2018, 2019 and 2020, representing a 17% increase in 2018 dividend.

Copyright © 2024 FashionNetwork.com All rights reserved.