Inditex Earnings: Continues to Deliver

We are maintaining our fair value estimate of EUR 35 per share for narrow-moat Inditex after the company reported another set of strong full-year results. While revenue practically matched our forecasts, its operating profit exceeded our expectations, delivering a margin of 18.9% (we forecast 18%) on the back of a stronger gross margin (57.8% or 80-basis-point improvement from last year). While we believe Inditex should continue growing through market share gains, we think further margin progress could be more limited given the competitiveness of the apparel sector.