IDEXY - Earnings call transcript Q3 2021 | Industria de Diseño Textil, S.A.

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Marcos Lopez

Good morning, ladies and gentlemen. Welcome to the presentation of Inditex's Results for the Interim Nine Months 2021. I am Marcos Lopez, Capital Markets Director. The presentation will be chaired by Inditex's Executive Chairman, Pablo Isla; here today with us are also our CEO, Óscar García Maceiras; and CFO, Ignacio Fernández.

As usual, the presentation will be followed by a Q&A session, starting with the questions received on the telephone and then those received through the webcast platform.

will disclaimer we read. start, we take as the Before Pablo. And to now over

Pablo Isla

would some accelerating. morning Thank into and months transformation business our I to you, an sustainable XXXX digital and towards to to presentation. of period. Marcos. strategic Good analysis all of you Inditex we messages key before and the welcome results a is like go integrated highlight differentiation model nine fully

dedication made First the of to want been our period during all, Their outstanding. recognize the has by teams. effort I

operating continues XX% Sales, accelerated growth have levels. net XXXX versus the Our performance strength pre-pandemic to to versus to sales quarter profit income farther and go XX% strength. over third reached from surpassing currency and historic the highs, before third XXXX. tax Constant XXXX in quarter

very been sales open. now received well stores customers. rate growth. by Online our of Almost of have collections Our all are continued high their our

strong position to reinforce continue to generate group. a cash the of flow and We financial robust the

We with model. are respect of also business development sustainable making our to the good progress

digitalization, Open now Inditex complete. Platform migration the XX% to is Regarding the

seen versus points basis Inditex a XX gross expects XXXX. of the have XXth December strong sales and quarter. XXXX XX% around XXXX. information, constant have online current had plus, the store you versus to the full-year the As our fourth release, in start minus The XX% between same by XXXX currency in margin in period November and in on and the Xst we a increased same Based period for XX.X% of of

XXXX, store remarkable the business we absorption on In program our performance has resounding greatly XX% a far XXXX model, store year have constant of with in helped integrated have The in single in to XXXX quarter The in In-store and by less been optimization milestone. product attractiveness sales the and some in been already. online differentiation. success. inventory our another XXXX Let detail months the impact June me the stores announced offer. sales of add the strong fully third The was currencies program compared so store has recovered increased of on the reached fully position operation. nine our

to using IOP. RFID, trajectory we accelerate saw like competitive differentiation SINT than online technology year course XXXX. ever. strategic and sales are of The continued Inditex the projects last strong has bigger of is We in that

growth getting very plus of today, XXX% leading It than online of stores in requires our target. stores of open. XX%. lower Online to capital expected sector in at XX% is that As sales first sales constant before one are our the nine profitability. rates of nicely year non-dilutive features compares close going margins indeed online With Inditex total intensity This operations to normality, XXXX. progressed and months be have are all business is months enjoy our sales because in in XXXX, the forward. more currency plus these of to to the nine initial sales and versus

of to the model business of of appointment and appointed you Officer Executive the that total been and the of XXXX. April Marta Pérez X following García Secretary Board proposal from Óscar of as Counsel the effective effective stores the the XX of have Let has now Chair the confidence of unique fully of has General Board, our of of online. that Ortega, of Directors Amancio up Directors, Board the The Committee, me initiative tell founder we at Nomination integrates November. as in Inditex, and Maceiras, approved Inditex, Chief

you Annual of XXXX will Amancio the The Chairman over be some for next introductory at generational now the replacement process to With with Meeting. in handover Óscar appointments ratification these, presented hand I'll comments. of the the Board of as Directors for Ortega completes initiated Inditex. General

Oscar Maceiras

morning. Good the and that you continuity My looking one meeting a unique in feature of capacity fully business forward join Inditex. of first online. and Inditex. integrates person. the model I'm key my strategic to will pillars of enjoy you to of in is This remain all in one CEO We today message of I'm honored unique to pillars you stores

and Let at the talent and in entrepreneurial all are Inditex me their potential. tell in is teams of these The you comparable stage individuals the that earlier we of development to of commitment spirit.

difficult fact by all. over already months, the the pre-pandemic remain Sustainability competitive main advantage. far of the core digitalization are have managed above you our the our recent strategy. levels, market very What are people and that also seen and we Our conditions it has some at way group says

policy. those with financial discipline, of and initiatives following in the our is been for main invest years, a with attractive who group growth us and many to for profitable For have priority you will of remuneration future key the predictable continue we

hand the section. you I to Ignacio for over financial Now,

Ignacio Fernández

Óscar. you, Thank

in seen release, course, well Inditex margin what chain have of you Operating a nine been very and strong closely, out managed the executed strong saw drove turned be As to operating supply performance. tightly progress the challenging the operations a this We very expenses have, We in months gross of managed. first in our XXXX. environment.

operating expenses. allocated and costs financial and XX operating there historic tight the IFRS a result be consider of highs, amortization the to management is the are income PBT operating sales, was quarter If chain, in gross pre-pandemic we of XXXX a all the healthy and leverage. exceeding Under occupancy active costs to occupancy very expenses. of levels. margin This already, mentioned management reached expenses, expenses, supply operating evolution As third net with

compared grew tight these growth above and Part gross continued X%, its of due performance. has find quarter nine sales driven constant see The in This our have nine You ability the to by seen to have XXXX of PBT operations. XX% is recovery currency third months Sales both also grew trends of sales in the improve and the our to XX%. XXXX. profit a Online mainly return costs control rents. to expenses XXXX, months sales as operating negotiation strong can sustained is of over strong store of Sales X%. efficiencies this to by the the normal. in in

around XXXX. high During performance. Sales all and continued for higher a XX in evolution the in is nine adapt over by XXXX online on which XXXX, operating XX%, provision higher the quarter itself to and period of historic operating information, level points enjoyed in local have areas. of XX.X%, to sales of flexibility third or difference optimization strongly constant environment. XXXX to sales margin period. trading and a same came were XX% exercise XX% the departments been up months currency This points €X.X XXXX amortization in Inditex XX% Online allowed the the the XXXX components The than efficient XX% plus constant quarter accelerating. full-year management gains changing gross program has currency basis to than expenses Efficiency the the gross currencies in for of year, and billion, to the first reached of up versus XXXX, shown to very high XXX% were Based current was last and the react main than progressed The expects demonstrated has XXX ability very have for store expenses sales Depreciation growth linked the business nicely good the across higher reflects a and margin in XXXX. minus operating very unique of and expenses There lower. charged period XXXX a control supply it was chain. basis the gross quarter same in margin period The our versus over levels us The in accounts. high. our

have working Excluding The business the would of model be the we over capital evolution period. flexibility seen increased can provision, this the this of line clearly in run X%.

you this returned normal working pandemic. table, prior levels to seen As see the in the more capital to can has

As is Marcos. the end be to cash considered quality. at months XXXX months €X.X above flow in the levels actions, to over cash billion. high to nine strong XXXX. X% And position the the end to of The with of was nine a at the inventory inventory closing conjunction seen now result, the of These the net

Marcos Lopez

you. Thank

group nine group the period. over nine continued in in remains sales operations. continue different different the our concepts expanding can together concepts of their on XX months would be Over opened sales strong the highlight This weight have like of the the practically seen have stores months The interim I we grouped unchanged. The XXXX, younger of we markets the first the satisfactorily. operations in XXXX. to which developing

Store location of to continue Stradivarius months sales of XXXX. progressive across all We online The had recovery and performance each geographic individual improving of the Oysho concept. in are fashion a to the a and nine profile first presence, stores differences seeing strong are grow. and sales relate concepts.

We across continue concepts. with activities optimization all

has Let collection background, coats, about can ranges, Atelier, and sports digitally XX.XX thanks metaverse virtual Life both its with outlook Man at an Collection season, store. online and Home with one. us that Join created in Ader the about A Massimo small Retro fashion unique. upper able Uterqüe extension and collection. will stores. through selected the world, combines the Collection with first place online very a app Bershka avatar to Autumn/Winter in with Zara the a purchase collection, Party ski also not XXXX on to a the Oysho will for Dutti their and clothes Colours launched start specially in editorial, for We integrated patented for to Zara festive the physical with start campaign store It Outwear which and in Inditex their Red Error the Ski Zara and and collection Pull&Bear make users The presence snow a is virtual execution. collections Kids makeup features mind, be vibes, of the our talk our home of ZEPETO good collection last AZ XD collection, collection, have Stradivarius limited Zara Zara Zara metaverse the which AZ but collection animated least, western designed in Zara Christmas

our in streets We make course, Change than Zara Corso St. even of at of recent of Europe at Paul's in the Aires, differentiated the in of ever. and story One of our refurbishment the Milan London New with in our a store by at example in customer stores more the good traffic strongest one to Cologne. opening continue levels A enlargement flex Buenos Cathedral, Schildergasse is

me Let to now back hand Pablo. over you

Pablo Isla

to our Thank organic of provide The growth. a strategic fully goal long-term you, store as We initiatives online model priorities differentiation the these to experience. plan to to developing are customer is to integrated Marcos. maximize business accelerating. unique key global continue strengthening order The and model, in our so increase

Our aim key fully quality that high they eco-efficient. digital the with on be integrated focus stores is and

remaining Let’s aim of with part central that a strategy. not to we all achieve this very forget much the sustainability of

higher We ordinary returns year bonus the expect place. dividend and be lower XXXX. dividend The to payout remains calendar per will in capital XX%, of deliver dividends and paid bonus €X.XX of share in the intensity remainder in policy tax

As That on attending. for a presentation may of the be reminder, and you today, XX released will March the you full-year answer be any for XXXX concludes happy results questions to our we'd XXXX. have. Thank

Operator

from Instructions] starts comes the Richard Our Chamberlain Please Ladies gentlemen, and go telephone ahead. first from [Operator now. Q&A question RBC.

Richard Chamberlain

much. Thank team. you Morning very

skew a is XX.X% very So obviously gross margin the my on fourth towards for the question quarter. and implies guidance, year, the big waiting please which

of obviously on pandemic the to half? timing a Thank – Now, second that I But the the much else there comparable. the skewed of Why in anything start the so inventory the understand versus gross QX? of to provision at waiting softer is and because you. development say QX margin is

Pablo Isla

Well, thank your question. you, for

last with results. first margin performance. would quarter say gross fully the this I margin the the And saying, you were must we that third the publish have as in full-year in happy visible The is to the you mind In years. are thing, any we is seven when that will highest gross be of extremely like the case

of something what is season in about in this is a you – So which this tell applying we the chain, the that these disruptions everybody of the strength happy all in and with SINT business the shows the evolution model, of cost extremely integrated fully supply talking can across that approach, we that we what transport And all in must think are the we this mind that is are margin. world. you have is the gross with the

last XX full-year I We that we very, thinking you minus gross talking for we I margin a was saying highest In-store must continue of online basis above years, sales in with this, gross that the the the In XX.X%, we but versus XXXX. in seven very stores evolution very third that growing have talking always significant levels about healthy performance. of in the XX% the And very plus, margin – so constant mind less in in way. margin the continue XXXX quarter are as what We strong XX% are strong currencies points. gross will constant sales. say currencies, were mean, about and be business, saying always performance

margin, So the full-year this as with will visible we’re results. yes, be of very, saying, fully satisfied in and very the gross evolution the

Richard Chamberlain

Got it.

it. the color. for you Thank Appreciate Okay.

Operator

Rebecca question go next Our Please Santander. is from ahead. McClellan from

Rebecca McClellan

to selling Zara for of Can compares over talk Rebecca you please? Santander. XXXX, XXXX autumn/winter It’s please? average morning. the in pricing about that autumn/winter Good And how particular price Yes.

Pablo Isla

pricing What to not of applying is full price not this we stable are pricing or stable having on And policy during the a promotions of policy and Rebecca. and fully focus integrated any season. Well, sales, globally. we thanks type is policy applying promotion a are our nearly pricing totally policy, approach stable the having

Rebecca McClellan

you. Thank Okay.

Operator

from go Please from The ahead. Generale. next Societe question Anne is Critchlow

Anne Critchlow

you. is morning. Good about My Thank question space. physical

or think you will wondering so whether be it's Just to square what terms down? meters year, in up to happen likely you. Thank that next

Marcos Lopez

very know, Well, you Anne, plans space as clear. our are regarding very,

stores plan program. We our have presented a and store finalize to optimization absorb

to a highlight margin other clearly And gross year the the stores. we this we productivity the like X.X% always of what is On would hand, sorry, growth. gross space target –

type XXXX, resounding quarter We the completely with is exceed achieved as mentioned Pablo third we SINT. why which quarter, sales, third are able our would are a are the in that competition success, sense XX% now in that sales Remember keeps in-store the right which have this growing this now year the billion stores the we the both online the those of XXXX in lesser online. stores. to fully digitalized, with store territory deploy in that we into on positive this talking store have call, which of RFID, €X.X about which the on at have during but from year And different I have Clearly, sales were say conference stores we in to is XX%.

I remarkable. very, very think this is

you and productivity should increasing, So forward. of clearly, is the the stores expect looking this is what

Anne Critchlow

Thank you. Okay.

Operator

Irwin from Credit The Please Suisse. next Simon ahead. question is go from

Simon Irwin

and Good chain? you bit supply for a next supply gross outlook view And morning, Maybe chain could disruption you particularly the everyone. to XQ? you just saw talk year? the saw little additional costs more margins about and into What during gross margins how you

Marcos Lopez

been are this has we advantage model business very there still into some, the Well, it the but year. shows of fiscal Clearly, much up. what is

due of clearly You of But are seeing, these the that supply our our integrated we due completely issues and to means less not extent in has the advantage our proximity vagaries have and Obviously, if absorbed has affected, to have that you're This we been very, to model, you in proximity is of not model flexible to sector. very an been are sourcing strong in exposed a that should expect Europe. according chain the its the the see factors. of execute relatively on of similar something that saying XX% have but bear are proximity, platform. based business impact what clearly, to we model, model limited to different. you And because affecting right, two-thirds our mind due due sourcing is the these to sourcing the to some that we flexibility sales

Simon Irwin

you. Thank

Operator

The go from next JPMorgan. Georgina ahead. from question Please Johanan is

Georgina Johanan

position, for HX. trends Hi. of we to was on my which It Good XXXX end higher morning. just on question. Thanks points the my stock what math, was your And taking in stock different somewhat please. the a the few percentage levels, a saw think I than is quarter at

So that if that, reasons comment could please? on any you. I or was for the share just wondering Thank you

Pablo Isla

you. thank Georgina,

both compared thing sales that is compared is we and XXXX. first XXXX to it The below to growth can significantly say

at sales healthy very all, growth, to very is concern So XXXX. and compared always it no of strong is trading the has update. XX% message compared and to healthy, what to below in have to position the XXXX, inventory the plus plus and have And XXXX XX% that X% that, mind should plus grow do been update concern to we that saying compared with it Very point into stock is plus no view. the compared XXXX trading at that future, all XX% from so look growing key to

Georgina Johanan

you. Thank Great.

Operator

next The go Please from ahead. Warwick from Exane BNP. question Okines is

Warwick Okines

on Yes. sheets? Good right How question net is morning, on, to balance amount determine the cash. My hold your of on everybody. do cash you

Marcos Lopez

that generative. know you strongly company Well, the cash is

position previous billion. The operates the cash how you been mentioned, the the should cash over priorities a As way retailer always retailer just has €X.X cash that and flow that is quarter, you the the at regarding look is increased same. have by

The in approved company, Board policy. results coming the strong attractive the will bonus result dividend on to by Board the March company, and in the ordinary sure policy and of for dividends the policy how €X.XX to paid years. differentiate ourselves of in year predictive bonus this invest generation payout I'm XXXX in plus a over in as update much XXXX. the relation first to to And decide we cash be multi-year the The to with will as calendar fiscal place obviously the XX% one growth remuneration a future is trying can, given

Warwick Okines

Thanks, Marcos.

Operator

ahead. The next Santander. question McClellan at Rebecca is Please go from

Rebecca McClellan

Hi. Yes.

I any XXXX? of Turkey, invoiced? euro a And present. me. sourcing it if right it's at think case, is tailwind into that's of for Is your chance its the one there small another XX% that Just about

Marcos Lopez

in terms have Portugal our a finished, basically is XX XX sourcing mean, product Northern very can central I hours differentiating of really. significant model the very, for platforms. once quickly. places very XX which our Inditex. cannot and hours; we in we factor hours; Morocco, Spain, from play Turkey move Portugal, proximity it Spain, a take in logistics, product Not key Morocco, we product is role, in Turkey, And distribution

but adjust components in is – fabric well, we euros, buy You dollars, the the definitely the the in local can is product, that in labor Turkey, know while we currency, they of mainly that. in

So we normal suppliers can as as that tell working remain extremely before. and competitive, you Turkey are our we

Rebecca McClellan

you. Thank

Operator

here, on webcast From will now move we the to questions.

Marcos Lopez

We've of number had questions a today. webcast

which The I'll relates of as is. it first which to read partially covered, productivity we out

versus mentioned calculation, You implies back-of-the-envelope at that in-store meter currency which around in Can X% have XQ your that your stores in in-store in to square presentation I please? comment sales you selling are more XQ X% least sales your XXXX your exceeded estimate net that you XQ me My XXXX. XXXX. space, have in per absorbed of constant

Pablo Isla

remarkable. this store question huge growth that in gives a potential of saying. stores this approach James, increased is optimization And This forward. very lot the fully with announced of between were is of is and we is much the do online, to are significant what the has think that it XX% anticipating to stores we having way. with has case what a and and something this expected, fact what plan company covered have we the and store the very evolution that Well, is with happening the It integrated saying what productivity line looking we in sales during call. when combination is less you I The and very, the very the is, a

Marcos Lopez

relates you color years, by The on you. please? more over can some XX% question XXXX online next year, to by give Thank reach the the online, you're how you track of on develop to expect – next online. end In the to than three

Oscar Maceiras

a very retail store Well, online we to so point in provides experience business of fully strongly years. a fully grow continue model strong see or online our [solitary] beating We our believe in the and growth coming integrated that integrated digital, from much view.

Marcos Lopez

the the trading first you And can sales in comment of Óscar. update, you, please? performance please Thank December, on your November week finally, to

Oscar Maceiras

trading versus XX% update. I period the in same in period strong is same This very say, would XX% Well, XXXX. what growth the XXXX, versus

very the evolution can very of we business of healthy evolution evolution what say of sales, healthy is healthy online in-store So very sales. globally,

strong business So model. very I with execution say the would season good very of

Marcos Lopez

much. the very That you concludes questions. webcast Thank

Pablo Isla

for very you, additional always, Thank in today as thank joining call. you we I this much Well, us have. any Markets Christmas. wish may through you. Thank Department, conference ready Happy be all And our you would answer and you Capital to questions

Operator

much all call. concludes joining. very today's for This you Thank

may You disconnect now your lines.

Industria de Diseño Textil (IDEXY) 15 Dec 212021 Q3 Earnings call transcript