IDEXF - Inditex: No Stopping The World's Premier Fast Fashion Compounder
2024-06-22 11:06:20 ET
Summary
- Inditex defies expectations yet again.
- The near and long-term outlook remain bright.
- Given the compelling setup, I wouldn’t bet against the stock.
Apparel retailer Industria de Diseño Textil, or ‘Inditex,’ (IDEXY) continues to go from strength to strength. Despite intense competition from incumbents (H&M (HNNMY)) and upstarts (Shein) alike, the business remains as profitable as it’s ever been. Growth hasn’t slowed either. Since I last covered the stock (see Inditex: Fast Fashion Compounder With A Possible Near-Term Catalyst ), the company has delivered a solid set of Q1 2024 numbers and an even better guidance update. As for the mid-term outlook, things look rosy as well, with management well on track with its growth and efficiency initiatives. Progress here will not only add to earnings growth but also capital efficiency, which bodes well for the ~4% (and growing) dividend yield. In the meantime, pricing isn’t too demanding at 20x free cash flow (high-teens ex-cash), leaving ample room for this consistent compounder to keep working its magic....
Inditex: No Stopping The World's Premier Fast Fashion Compounder