Inditex(US:IDEXY) GF SECURITIES·2026-03-14 13:41Investment Rating - The report assigns a "Buy" rating for the textile and apparel industry, indicating an expected performance that will exceed the market by more than 10% over the next 12 months [36]. Core Insights - Inditex reported FY2025 results with a revenue of €39.864 billion, a year-on-year increase of 3.19%, surpassing Bloomberg's forecast of €38.622 billion [4]. - Operating profit for FY2025 reached €7.997 billion, up 4.95% from the previous year, also exceeding the expected €7.480 billion [4]. - Net profit for FY2025 was €6.220 billion, reflecting a 6% increase year-on-year, compared to the forecast of €5.866 billion [4]. - Gross margin for FY2025 was 58.25%, an increase of 0.72 percentage points, while net margin improved to 15.60%, up 1.90 percentage points [4]. Summary by Sections Revenue Breakdown - By brand, Zara generated €28.051 billion, a 1% increase; Pull&Bear achieved €2.546 billion, up 3.10%; Massimo Dutti reached €2.019 billion, up 3%; Bershka saw €3.286 billion, a 12.2% increase; Stradivarius earned €3.002 billion, up 12.7%; and Oysho reported €0.960 billion, a 15.5% increase [4]. - Regionally, revenue from Europe (excluding Spain) accounted for 51.3%, up 0.7 percentage points; the U.S. contributed 17.8%, down 0.8 percentage points; Asia and other regions made up 15%, down 0.7 percentage points; and Spain accounted for 15.9%, up 0.8 percentage points [4]. Store and Inventory Analysis - As of January 2026, Inditex operated 5,460 stores, a decrease of 103 stores year-on-year. The breakdown includes 2,089 Zara stores (down 61), 791 Pull&Bear (down 9), 511 Massimo Dutti (down 17), 852 Bershka (down 2), 834 Stradivarius (down 1), and 383 Oysho (down 13) [4]. - Cash and cash equivalents stood at €5.276 billion, a decrease of 17.33%, while inventory was €3.249 billion, down 2.17%. Inventory turnover days improved to 72.05 days, a reduction of 3.51 days [4]. Performance Outlook - Inditex focuses on four key areas: enhancing fashion concepts, improving customer service, emphasizing sustainability, and developing a world-class team [4]. - The company expects a store area growth rate of around 5% in 2026, which is anticipated to positively impact sales [4]. - Gross margin for FY2026 is expected to remain stable, with fluctuations of ±50 basis points [4]. - Capital expenditure for FY2026 is projected to be approximately €2.3 billion [4].