The evolution of Inditex’s business with the numbers that it has presented to the market this morning is very positive and more so if we take into account the economic situation and the circumstances of these three months for which it presents figures. Inflation has been well managed on the cost side and not only does it not erode margins but, for example, the gross margin improves by 13% and if we go down the income statement, the EBITDA margin rises to 28.8%, the EBIT margin rises to 19.5% (from 15.3% in 1Q22), the net margin goes to 15.3%, from the previous 11.3%. Expenses grow less than sales, less than EBITDA, less than EBIT. A very remarkable resilience to the macro situation. On the financial side, an absolutely unconcerned balance of the monetary restriction with good generation of flows. As for the variation in stores, there was a reduction in the number of stores, however space grew by +3% and there were openings in 17 different countries. In 2022, it invested around €1,100M and for this year it estimates a figure of 1,600M in ordinary investment, so I do not expect a reduction in size, quite the contrary. In summary, resilience, very good inflation management, growth, strong demand and a very well oriented strategic plan.

By multiples and being prudent, without ruling out an upcoming upward revision in anticipation of figures for the end of 2023, the Galician trades with a PER of 21.7v, the market pays 2.87v sales, 15v its cash flow. The return on equity, ROE upwards and 26.3% estimated by the end of 2023; yield on dividend-yield exceeds 3.7%. Based on a fundamental assessment, my recommendation is positive for a long-term investment horizon.

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