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1. Company Snapshot

1.a. Company Description

Industria de Diseño Textil, S.A. engages in the retail and online distribution of clothing, footwear, accessories, and household textile products through various retail concepts.The company sells its products under the Zara, Pull & Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, and Zara Home brands.It is also involved in the textile manufacturing, logistics, design, insurance, construction, and real estate businesses, as well as provides financial services.


The company operates in Spain, rest of Europe, the Americas, and internationally.Industria de Diseño Textil, S.A. was founded in 1963 and is headquartered in A Coruña, Spain.

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1.b. Last Insights on ITX

Breaking News: Inditex, the parent company of Zara, reported strong sales growth, beating analyst forecasts for the start of its fourth quarter. Sales grew 2.7% in the first nine months of its fiscal year, with a positive consumer response to its collections. The company saw an 8.5% increase in sales to $11.4 billion and a 6% increase in gross profit to $7.1 billion. This performance suggests a strong start to the company's fiscal fourth quarter. Some analysts view Inditex's results as a trend indicator in global fast fashion.

1.c. Company Highlights

2. Inditex's Strong 9M 2025 Results: Growth and Profitability on Track

Inditex reported a robust 9-month performance for 2025, with sales in constant currency rising by 6.2% to EUR 28.2 billion, driven by a 2.7% growth. The company's gross margin expanded by 79 basis points, contributing to a 3.6% increase in profit before tax to EUR 6 billion. Net income also grew by 3.9% to EUR 4.6 billion, with earnings per share (EPS) coming in at 0.586, beating analyst estimates of 0.555.

Publication Date: Dec -04

📋 Highlights
  • Sales Growth:: Constant currency sales rose 6.2% to EUR 28.2 billion in 9 months 2025.
  • Gross Margin Expansion:: Improved 79 basis points to 21.2%, driven by efficient business model execution.
  • Profitability:: Pre-tax profit grew 3.6% to EUR 6 billion, while net income increased 3.9% to EUR 4.6 billion.
  • Store and Online Sales Momentum:: November 1–December 1 sales surged 10.6% in constant currency.
  • Logistics Investment:: EUR 1.8 billion in capex for 2025, plus EUR 900 million annually for two years to expand logistics capacity.

Operational Highlights

The company's diversification across 214 markets continues to support its growth opportunities, with low market penetration in most countries. Store and online sales in constant currency between November 1 and December 1 grew by 10.6%, indicating a strong momentum. CFO Andrés Sánchez noted that sales grew at 4.9% in Q3, despite being impacted by 350 basis points of currency headwinds.

Margin and Expense Management

Inditex's EBITDA advanced 4.2% to EUR 8.3 billion, with a PBT margin reaching 21.2%. The company demonstrated flexibility in its business model, with operating expenses growing 33 basis points below sales growth. Gross margin guidance for the full year 2025 remains stable, with a slight bias to the positive side.

Growth Strategy and Investments

Inditex continues to invest in enhancing the customer experience, with a focus on store upgrades, technology, and logistics expansion. The company expects annual gross space growth to be around 5% in the period 2025-2026. Ordinary capital expenditure is estimated at approximately EUR 1.8 billion for 2025, with a 2-year extraordinary investment program allocating EUR 900 million per year to increase logistic capacities.

Valuation and Outlook

With a P/E Ratio of 28.27 and an EV/EBITDA of 15.35, Inditex's valuation suggests a premium for its growth prospects. Analysts estimate next year's revenue growth at 6.8%. The company's strong performance, coupled with its growth strategy and investments in stores and logistics, is expected to drive future growth. The ROE of 32.34% and ROIC of 27.93% indicate a strong return on equity and invested capital, respectively.

3. NewsRoom

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Industria De Diseno Textil SA (IDEXF) Q3 2025 Earnings Call Highlights: Strong Sales Growth and ...

Dec -04

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Zara owner Inditex reports Q3 2025 sales up with positive start to Q4

Dec -04

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V.F (VFC) Valuation Check After Peer Inditex’s Sales Boost Lifts Apparel Sector Sentiment

Dec -04

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Inditex (BME:ITX): Reviewing Valuation After Strong 2026 Nine-Month Earnings and IBEX-Beating Share Performance

Dec -04

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Why VF Corp (VFC) Stock Is Up Today

Dec -03

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Boeing Rival Airbus, Zara Owner Inditex: Stocks Overseas in Spotlight

Dec -03

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American Eagle, Marvell, Softbank: Trending stocks

Dec -03

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Zara owner Inditex beats forecasts with strong start to winter

Dec -03

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.15%)

6. Segments

Zara / Zara Home

Expected Growth: 6.5%

Zara's 6.5% growth is driven by strong brand appeal, efficient supply chain, and agile business model. Its fast-fashion strategy, enabled by quick design-to-production processes, allows for rapid response to changing consumer trends. Expansion into online channels and home decor through Zara Home also contributes to growth, leveraging Inditex's integrated retail model and global footprint.

Other

Expected Growth: 5.0%

Industria de Diseño Textil, S.A.'s growth of 5.0% is driven by strong brand portfolio, efficient supply chain management, and expansion into online channels. The company's ability to adapt to changing consumer trends and increasing demand for sustainable fashion also contributes to its growth. Additionally, strategic investments in digital transformation and store refurbishments enhance customer experience, driving sales.

Bershka

Expected Growth: 5.5%

Bershka's 5.5% growth is driven by Inditex's strategic expansion, strong brand appeal, and efficient online-offline integration. The fashion retailer's ability to adapt to changing consumer behaviors and preferences, while maintaining quality and style, has contributed to its growth. Additionally, Inditex's investments in digitalization and logistics have enhanced Bershka's operational efficiency.

Eliminations on Consolidation

Expected Growth: 0.0%

The 0.0% growth in Eliminations on Consolidation for Industria de Diseño Textil, S.A. suggests that intercompany transactions and eliminations have stabilized, with no significant changes in the consolidation process. This stability implies that the company's business segments are likely operating independently with minimal intra-group interactions.

7. Detailed Products

Zara Clothing

Zara offers a wide range of clothing items for men, women, and children, including tops, bottoms, dresses, outerwear, and more. Their clothing line is known for its on-trend designs, high-quality materials, and affordable prices.

Massimo Dutti Clothing

Massimo Dutti offers high-quality, stylish clothing for men and women with a focus on business attire, formal wear, and elegant casual clothing. Their products are known for their classic designs, attention to detail, and high-quality materials.

Oysho Swimwear

Oysho offers a wide range of swimwear for men, women, and children, including swimsuits, rash guards, board shorts, and beachwear. Their products are known for their high-quality materials, comfortable designs, and stylish prints.

Pull&Bear Clothing

Pull&Bear offers trendy, casual clothing for young men and women, including tops, bottoms, dresses, and outerwear. Their products are known for their affordable prices, comfortable designs, and on-trend styles.

Bershka Clothing

Bershka offers a wide range of clothing and accessories for young men and women, including tops, bottoms, dresses, outerwear, and shoes. Their products are known for their on-trend designs, high-quality materials, and affordable prices.

Stradivarius Clothing

Stradivarius offers elegant, sophisticated clothing and accessories for women, including dresses, tops, bottoms, outerwear, and shoes. Their products are known for their high-quality materials, attention to detail, and classic designs.

8. Industria de Diseño Textil, S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Industria de Diseño Textil, S.A. (Inditex), the parent company of Zara, operates in the fast-fashion industry where substitute products are available, but the company's ability to quickly adapt to changing fashion trends and offer high-quality products at affordable prices reduces the threat. However, the rise of online shopping and fast-fashion competitors increases the threat level.

Bargaining Power Of Customers

Inditex's customers have a wide range of choices in the fast-fashion industry, but the company's strong brand portfolio, including Zara, and its ability to offer trendy products at affordable prices reduce the bargaining power of customers. Additionally, the company's efficient supply chain and logistics enable it to respond quickly to changing customer demands.

Bargaining Power Of Suppliers

Inditex has a large and diversified supplier base, which reduces the bargaining power of individual suppliers. The company's scale and negotiating power enable it to secure favorable prices and terms from its suppliers. Additionally, Inditex's commitment to sustainability and social responsibility encourages suppliers to work with the company.

Threat Of New Entrants

The fast-fashion industry has relatively low barriers to entry, but Inditex's strong brand portfolio, efficient supply chain, and significant investments in technology and logistics make it challenging for new entrants to compete. However, the rise of online shopping and social media has reduced the costs associated with entering the market.

Intensity Of Rivalry

The fast-fashion industry is highly competitive, with many established players, such as H&M, Uniqlo, and Gap, competing for market share. Inditex's main competitor, H&M, is a significant rival, and the two companies engage in intense price competition. Additionally, the rise of online shopping and fast-fashion competitors has increased the intensity of rivalry in the industry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 0.04%
Debt Cost 6394.07%
Equity Weight 99.96%
Equity Cost 9.67%
WACC 11.98%
Leverage 0.04%

11. Quality Control: Industria de Diseño Textil, S.A. passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
BMW

A-Score: 6.3/10

Value: 9.1

Growth: 5.6

Quality: 2.5

Yield: 8.8

Momentum: 6.5

Volatility: 5.7

1-Year Total Return ->

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VW

A-Score: 6.3/10

Value: 10.0

Growth: 3.6

Quality: 2.4

Yield: 10.0

Momentum: 5.0

Volatility: 7.0

1-Year Total Return ->

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Mercedes-Benz

A-Score: 6.3/10

Value: 8.9

Growth: 4.9

Quality: 3.3

Yield: 10.0

Momentum: 3.5

Volatility: 7.3

1-Year Total Return ->

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Inditex

A-Score: 5.9/10

Value: 3.6

Growth: 6.2

Quality: 8.6

Yield: 6.2

Momentum: 3.0

Volatility: 8.0

1-Year Total Return ->

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Michelin

A-Score: 5.9/10

Value: 6.4

Growth: 4.7

Quality: 4.7

Yield: 8.8

Momentum: 3.0

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
NEXT

A-Score: 5.6/10

Value: 1.8

Growth: 5.7

Quality: 6.7

Yield: 4.4

Momentum: 7.0

Volatility: 8.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

54.54$

Current Price

54.54$

Potential

-0.00%

Expected Cash-Flows