Industria De Diseno Textil SA (IDEXF) Full Year 2024 Earnings Call Highlights: Strong Financial ...
Revenue Growth: Sales increased by 7.5%, reaching EUR38.6 billion.
Net Income: Increased by 9% to EUR5.9 billion.
EBITDA: Grew 8.9% to EUR10.7 billion.
Gross Margin: Achieved 57.8%, with gross profit increasing 7.6% to EUR22.3 billion.
Free Cash Flow: Significant generation, with net cash position at EUR11.5 billion.
Operating Expenses: Grew 126 basis points below sales growth, demonstrating good operating leverage.
Inventory: Increased by 12% compared to the previous year.
Dividend Proposal: Increase of 9% to EUR1.68 per share.
Store & Online Sales: Grew 4% in constant currency between February 1 and March 10, with a 7% increase in the last commercial week.
Capital Expenditure: Estimated at EUR1.8 billion for 2025.
Logistics Expansion Plan: EUR900 million per year for 2024 and 2025.
PBT Margin: Increased 50 basis points to 19.6%.
Return on Capital Employed: Increased 101 basis points to 40%.
Warning! GuruFocus has detected 4 Warning Sign with STU:OHCB.
Release Date: March 12, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Industria De Diseno Textil SA (IDEXF) reported a strong sales growth of 7.5% for 2024, demonstrating consistent demand for its collections.
Net income increased by 9% to EUR5.9 billion, showcasing solid financial performance.
The company plans to propose a 9% dividend increase for 2024, reflecting confidence in its financial health.
The fully integrated Store&Online model has been a key driver of recent strong performance, with Store&Online sales in constant currency increasing 7% in the last commercial week.
The company has a strong commitment to sustainability, with 73% of textile fibers used in manufacturing being lower-impact fibers by the end of 2024, aiming for 100% by 2030.
The Americas region experienced an underlying slowdown excluding FX impacts, indicating potential challenges in this market.
The company expects a minus 1% top line FX impact in 2025, which could affect revenue growth.
Operating expenses grew 126 basis points below sales growth, indicating a need for continued cost management.
Inventory levels increased by 12% compared to the previous year, which may suggest potential overstocking issues.
The company faces challenges related to changing tariff regimes, particularly in the US market, which could impact profitability.
Q: Can you comment on the outlook for the Americas region, considering the recent slowdown excluding FX? A: Gorka Garcia-Tapia, Investor Relations, explained that while there has been an FX impact, the Americas region has shown positive growth at constant currency. The US remains a strategic market with ongoing projects, including store openings and enlargements, indicating continued growth expectations.
Q: What is the constant currency growth rate for Zara, and how much of the 5% gross space growth will benefit Zara? A: Gorka Garcia-Tapia noted that the company is confident in achieving a 5% gross space growth for 2025 and 2026. The store optimization program has driven productivity, with sales per square meter increasing by 28% from 2019 to 2024, benefiting all regions and concepts, including Zara.
Q: Can you provide insights into the recent trading performance and regional consumer behavior? A: Oscar Garcia Maceiras Gonzalez, CEO, stated that despite high comparables, growth accelerated to 7% in the last commercial week. The Spring/Summer collections have been well received, and the company remains confident in its execution and differentiation strategy.
Q: What are the medium-term growth aspirations, particularly with new logistics capacity? A: Gorka Garcia-Tapia confirmed a 5% gross space growth expectation for 2025 and 2026. The company has achieved around 2% net space growth with this rate, and the logistics expansion will support future growth.
Q: How has the rollout of soft tag technology impacted margins and operations? A: Oscar Garcia Maceiras Gonzalez highlighted that the soft tag technology has improved customer experience and operational efficiency. It is part of a broader initiative to integrate store and online operations, enhancing productivity and customer service.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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