Inditex will end 2023 with a record result, an increase in margins and a progressive acceleration of the digital transition that will lead its online sales to have a weight of 30% in its global income. The shares of Amancio Ortega’s company are trading in this scenario at historical highs close to 40 euros and analysts expect an increase in shareholder remuneration via dividend with a global payment of 1.45 euros per share in 2024, 21% more that in this 2023.
Growth would be lower than in 2023 (+29%), 2022 (+32.7%) and 2021 (+100%) but with a broader base that contemplates the total disbursement of more than 4.5 billion euros in dividends, according to The consensus of brokers and investment banks compiled by Bloomberg. Amancio Ortega, the main shareholder with two thirds (59.9%) of the capital, would thus earn up to 2,700 million in just 12 months, around 500 million more than what was collected in 2023.
Ortega will raise the dividend account accumulated since Inditex began trading on the stock market in April 2001 to the barrier of 20,000 million euros
In this way, the businessman born in 1936 in Busdongo de Arbas (León) raises the gross dividend account since Inditex began trading on the stock market in April 2001 to the barrier of 20,000 million euros, according to data compiled by ‘La Information’. In these 22 years, the increase in dividends year after year has been exponential and hand in hand with global business success that has turned the Spanish company into a benchmark in the fashion sector.
However, with the pandemic and the closure of activities, Inditex suspended part of the remuneration out of caution and reduced the dividend by 60%. From pre-pandemic levels, Inditex is close to doubling the payment to the shareholder and in 2024 it will set a record again, although the magnitude of the jump will depend on the close of its fiscal year in the coming months, since the team led by Óscar García Macei will close its annual accounts on January 31.
Logically, the increase in the dividend goes hand in hand with the improvement of the textile business, contrary to the trend of most competing companies. Analysts place Inditex’s target price at 40.8 euros per share. For the whole of 2023, they expect revenues of 32,569 million euros (17%), a net profit of 4,860 million (+15%) and a cash position that will exceed 10,000 million, a figure available for dividends, acquisitions or the opening . of new businesses. However, the textile company has not wanted to leave its sector even though it has added footwear, perfumes and fashion accessories to its clothing stores.
Analysis houses also expect a sales figure of 35.1 billion euros by 2024, with a profit of 5.3 billion euros. The evolution of the company’s gross margin will remain stable at around the 57% it has been registering in recent years. Inditex set the goal that its online sales represent 30% of its revenue figure, which will mean that in 2023 or next year this figure will be above 10,000 million annually.
More ‘online’, fewer but larger stores
The radical change in the business strategy of the Galician firm is reflected in the rise of online sales. This year, a 33% increase in sales per store is projected compared to 2022, reaching an average of 5.7 million euros for each commercial location. This figure represents almost double (+91%) that recorded two years ago, when García Maceiras assumed the position of CEO. This rapid growth in revenue per store coincides with the continued closure of brick-and-mortar locations and increases in store size.
During the last 12 months, Inditex has closed 585 stores, which represents 9.2% of its network, leaving a total of 5,722 stores. The greatest reduction is observed in the Oysho brand (-14.3%, remaining at 448 stores), followed by Zara Home (-10.1%, with 410 stores) and Bershka (-9.9%, with 856 stores) . The flagship brand of the textile group, Zara, has closed 161 spaces in the last year (-8.1%), reaching a total of 1,827 stores. Inditex will end the period with around 5,700 stores, its lowest figure since 2012. in Russia and as part of the commercial space optimization plan.
