Inditex impresses again with good growth and few markdowns
You can always rely on Inditex to turn in an impressive set of results and while so many of its retail peers are struggling, the company on Wednesday again pulled it off.
And it seems to have done so by holding its nerve and not joining in the discount frenzy that has been a feature of this year and this season.
The Zara owner reported net profit of €2.4 billion for the first nine months of its financial year, up 4% on the year, and maintained its guidance for the second half. Gross profit reached €10.7 billion, also 4% higher.
That came as net sales for the nine months reached €18.4 billion, 3% higher. And sales in local currencies grew an even better 7%.
The world's biggest fashion retailer, which also owns more upscale label Massimo Dutti and younger brand Bershka among others, had said back in September it expected like-for-like sales growth of 4% to 6% in H2.
The company looks like it has had a reasonably good time in the past few months and, as mentioned, said on Wednesday that it has avoided resorting to markdowns since September, unlike many of its retail peers. This has resulted in gross margin growth of 108 basis points during Q3, which must be a good feeling coming at a time when others are reporting lower margins.
The company also said overall like-for-like sales in H2 so far have grown 3% after a good start to the season and an unusually warm September in many markets.
It added that global online sales launches are “on track” and it’s certainly focusing heavily on this area. In November, Inditex launched online sales for Zara in an additional 106 markets so the brand is now available in a total of 202 markets. And all eight of Inditex concepts will be available online worldwide by 2020.
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