Inditex shares surged more than 7% after the company posted record results and boosted the dividend to shareholders by as much as 28%. The Arteixo-based textile group, headquartered in A Coruña, reported a net profit of 5.382 billion euros, up 30% from the prior year, with revenues reaching a record 35.947 billion euros, a 10.4% rise. These figures pushed the stock past its previous peak on the stock market, lifting its market capitalization beyond 135 billion euros. Year-to-date, the group has gained 11.62% and the shares traded at 44.11 euros each.
Analysts welcomed the results, which aligned with consensus expectations, and the market reacted positively to the figures announced on Wednesday. Expectations had pointed to revenue near 36.0 billion euros and a net profit around 5.362 billion euros. EBITDA for the year stood at 9.850 billion euros, up 14%, while the gross margin reached 57.8% of sales, about eight tenths higher than a year before.
These numbers also translated into greater shareholder rewards. Inditex plans to pay 1.54 euros per share, up 28% compared with the previous year, according to the proposal presented by the board ahead of the upcoming annual meeting. Up to 1.04 euros constitute the ordinary dividend, with an additional 0.50 euros as an extraordinary distribution. It marks the highest shareholder payout in the history of the group. The company also announced extraordinary investments of 1.8 billion euros for the current year, aimed at optimizing retail space, integrating technology, and enhancing online platforms.
“Delivering an Attractive Dividend”
The CEO of Inditex, Oscar García Maceiras, stressed on Wednesday that the company’s ambition is to continue seizing future growth opportunities, with a renewed focus on Spain where sales rose 13% and logistics investments accounted for nearly 90%. He also highlighted 2.23 billion euros in taxes paid. Speaking at a press briefing to discuss annual results with record profits and sales and a historic dividend, he affirmed that the company will invest as much as needed to grow and provide shareholders with an attractive dividend.
“These are excellent results, characterized by profitable, efficient, and responsible growth,” noted the Inditex CEO, underscoring double-digit sales growth across all formats. He pointed to a constructive outlook for 2024, supported by a solid financial position. Net cash rose 13.3%, reaching 11.406 billion euros.
Among its plans for the year, Inditex will continue to push into the United States, a strategic market, with the opening of its first Massimo Dutti at Aventura Mall in Miami. The company said it is positioned to pursue growth opportunities in the country in a way that is profitable and selective, expanding not only Zara and Massimo Dutti but also other formats in new openings.
Circular Economy
On the sustainability front, the company advanced its circular economy agenda with the Zara Pre-Owned platform, now available in 16 European markets and set to expand to new regions, including the United States in 2024. In Spain, the company remains strongly committed, posting a 13% rise in 2023 sales that outpaced the group average and maintaining almost 90% of its logistics investments.
The CEO reiterated the group’s headquarters effect, noting payments to 6,639 suppliers totaling 6.899 billion euros, a tax contribution of 2.231 billion euros, and a global tax contribution of 8.680 billion euros, with a tax rate of 21.5%.