Inditex's Momentum Makes It Sector Outperformer
Comment of the Day

September 08 2023

Commentary by Eoin Treacy

Inditex's Momentum Makes It Sector Outperformer

This note from the Dow Jones may be of interest.

Inditex has entered the second quarter with momentum and strong execution, and that should have continued throughout the quarter, making it comfortably the most consistent outperformer of the sector over this period, analysts at UBS say in a note. The Spanish fashion retailer's business model inspires confidence, and there is further upside in the shares to be expected, according to the analysts. In this context, the second quarter should again show that the company stands out among peers, the analysts say. Its differentiated sourcing model and focus on full-price sales should ensure stable gross margins, they add.

Eoin Treacy's view

The retail apocalypse entered a new stage during the pandemic because stores had to close and move online. With reopening, many stores have become order fulfilment stations, return locations while also selling new lines of merchandise. That’s a heady mix and difficult to get right. There are some clear winners and losers.

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