Release Date: March 12, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Industria De Diseno Textil SA (IDEXF, Financial) 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.
Negative Points
- 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 & A Highlights
Q: Can you comment on the outlook for the Americas region, considering the recent slowdown excluding FX?
A: Gorka GarcÃa-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 GarcÃa-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 GarcÃa-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.
