Inditex has had five record quarters and is on track for another historic year

Inditex add and continue Start the year as the previous one ended and sign the second one a quarter minutes. The Galician multinational concluded the first quarter of its fiscal year (from February to April) with benefit net of 1,168 million euros, 54% more than the harvest a year earlier. A figure based on a 13% sales improvement,

to 7,611 million and that without extraordinary costs such as 216 million that had to be accounted for in the first quarter of 2022 due to the closure of stores in Russia, a decision forced by the war in Ukraine. On Russian territory, the owner of brands such as tomorrow or Pull&Bear with 502 establishments and more than 9,000 employees and 10% of its collection is generated there.

Despite the multinational’s accounts of the blow inflation has dealt to the economy and the erosion it has caused to household purchasing power, its managers attribute the good progress of the business to the “creativity of their teams” and “flexibility”. » of a business model that «enables quick reaction» to customer requests. In addition, since the “spring-summer collections are very well received”. So much so sales increased in all geographic areas where the textile giant operates and in all formats. At constant exchange rates (that is, without the currency effect), they increased by 15%.

“Sales growth was very satisfactory during the first quarter of the year, and the implementation of the business model was strong,” congratulated the CEO of the multinational, Oscar García Maceirason a conference call with analysts shortly after filing accounts with the stock regulator.

However, is this the first time in the company’s history that the turnover exceeds the 7,000 million HRK mark in the first quarter of the year traditionally the weakest in sales. And it’s doing so for a long time: surpassing the previous estimate by 869 million. As for the profit, looking back, it has doubled compared to what the multinational achieved in this period just five years ago. And with the included pandemic.

A record first-quarter profit that beats analysts’ forecasts by more than 140 million and adds to what the textile giant has set for 2022. That year, the first of Martha Ortega in the presidency he collected 32,569 million, 17.5% more than in 2021 and 4,300 million more than the previous limit; and its benefit rose to 4,130 million, up 27%. All this, with sales in Spain increasing by 700 million to 4690. This last figure, translated to street level, means that every Spaniard spent a hundred euros on clothes from the multinational company.

More profitable

The ability of the Galician group to grow at this rate attracts the attention of analysts. Furthermore, not only did he not suffer during that time profitability, but increased. Thus, the gross margin increased by 14%, to 4,603 million and amounted to 60.5% of sales (34 basis points more than a year ago). Business expenses increased by 13%; and the operating result (ebitda, profit before taxes, depreciation) by 14%, up to EUR 2,195 million.

Inditex now has available cash of €10.508 million, 14% more than twelve months ago. For this year, it plans investments aimed at “increasing operational capacities, achieving efficiency and increasing differentiation” of around 1,600 million euros. In the first quarter, it opened stores in 17 markets, and at the end of the period it had 5,801. There are 622 less than the year before, which is proof of the success of the optimization plan of its commercial network, since it does not burden the billing.

For García Maceiras, the “key” to good results lies in the workers, from stores to warehouses, including design teams. In his “delivery” and “commitment” to the everyday company.

And everything says that 2023 will be another historic exercise for the owner of Zara. It is present in 213 markets, with a low share in each of them and in a highly fragmented sector, so it still sees “big opportunities for growth”.

The operation of the Galician multinational also has its reward on the stock market. It has an accumulated revaluation up to this year of 38% and again crosses the 100,000 million mark in terms of capitalization. Its shares rose 5.7% yesterday, leaving the company’s market value close to 105,000 million.

Zara will remove all hard alarms from its clothing items next month

In addition to analyzing the numbers for this first quarter of the year, Inditex yesterday set a date for some of the major milestones it has set for this year. In the innovation chapter, he announced that the elimination of hard alarms is just around the corner.. New security technology, a kind of virtual alarm that, among other things, will open the way for customers to self-payit will be available in all Zara stores worldwide in July, with the aim of trialling it in the autumn-winter 2023 campaign.

As for circularity, he specified that the Zara Pre-Owned platform —the business of selling, repairing and donating used clothes of the leading Inditex—available from November in the United Kingdom, will arrive in France, Germany and Spain in the second half of 2023. “With this platform We will continue to help our customers extend the life of their Zara garments through donations, repairs or person-to-person sales,” the company said.

Council changes

Inditex will hold a shareholders’ meeting next July 11. will be the last of Emilio Saracho as a member of the board of a multinational whose number of seats will be fixed at ten. That board will give approval of a dividend of EUR 1.20 per share at the expense of 2022, which is paid in two installments. One has already been made, and the second will be on November 2nd.