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Spain's Inditex fashion giant's earnings up more than 50% in first quarter with sales increase of 13%

Spain's Inditex fashion giant's earnings up more than 50% in first quarter with sales increase of 13%

Business ·

The Galician multinational is further rolling out its second-hand format called Zara Pre-Owned, in France, Germany and Spain in the coming months

E.M.

Madrid

Friday, 9 June 2023

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Inditex posted a net profit of 1.16 billion euros in the first quarter of its fiscal year 2023-2024 (between 1 February and 30 April), up 54% from a year earlier, thanks to a "strong" operating performance, the group said on Wednesday. Without the 216 million euro provision for Russia and Ukraine made in the first quarter of 2022, net profit would have been 940 million euros.

Sales grew by 13% and reached 7.6 billion euros, with a "very satisfactory" evolution both in shops and via the online channel. The fashion group founded by Amancio Ortega said in a statement that sales have been positive in all geographical areas and in all formats.

The gross margin grew by 14% to 4.6 billion euros and stood at 60.5% (34 basis points higher). Operating expenses grew 13%, below the growth in sales. Operating income (Ebitda) grew 14% to 2.19 billion euros, while net operating income (Ebit) rose 43% to 1.48 billion euros.

In the first fiscal quarter, the company opened stores in 17 markets. At the end of the period, Inditex operated 5,801 shops. Looking ahead to the second quarter, the company underlined that the spring-summer collections continue to be "very well received" by its customers.

One of the projects the Galician multinational is working on its second-hand format called Zara Pre-Owned, which was launched at the end of 2022 in the United Kingdom and which will be available in France, Germany and Spain in the coming months, according to the CEO, Óscar García Maceiras, during the presentation of the results. The aim is for customers to extend the useful life of their garments through donation, repair or sale between individuals as part of its sustainability policy.

In this way, the group offers the opportunity to repair, resell or donate second-hand Zara garments. The project is available in shops, online and via the mobile app. With the repair service, customers will be able to request alterations to any used Zara garment from any season, ranging from replacing buttons and zips to repairing seams. Customers can complete the process entirely online or in the Zara shop of their choice.

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