Inditex reveals record second-quarter sales and profit
By Rob Griffin
10:48, 15 September 2021
Inditex, one of the world’s largest fashion retailers, has revealed sales figures are higher than before the Covid-19 pandemic.
The Spanish company, which is best known for its Zara brand, said revenue, profit and cash generation in the second quarter reached historic highs.
In a statement, it also reported first-half revenue was up 49% to €11.94bn ($14.12bn) for the six months to the end of July 2021.
Strong online sales
Online sales in local currencies registered first-half growth of 36%, compared to the first half of 2020, and 137% against the same period in 2019.
In addition, online sales are expected to account for more than 25% of total sales in the full year 2021, while the first-half gross margin was 57.9%.
The net profit figure, meanwhile, came in at €1.27bn. This compares with a loss of €195m during the first half of 2020.
Second-quarter figures
The statement showed that second-quarter revenue grew 7% in local currencies, to €6.99bn, when compared with the previous historic high for the quarter, set in 2Q19.
Similarly, net profit for the second quarter 2021 reached €850m. This outperformed the previous high that was set in the second quarter of 2019.
The company also highlighted its ability to generate cash. As of July 2021, it had €8bn in cash, compared to €6.49bn at the same point last year and €6.73bn in July 2019.
Reaping the benefits
Cash generation remained strong: the Group’s net cash position reached an historic high of €8bn at the end of the first half this year.
Executive chair, Pablo Isla attributed the performance to everyone’s focus on delivering top creative and quality fashion.
“Thanks to all of them, we are reaping the benefits of the strategic and sustainable transformation in our unique business model,” he said.
Robust despite challenges
The company said its first-half earnings were robust despite trading hours being down by 15%, due to closures, limitations and capacity restrictions caused by the pandemic.
However, the second half of the year – particularly the period from the start of August to early September – has been encouraging.
Store and online sales, in local currencies, increased by 22% year-on-year and by 9% compared to the same period of 2019.
Uterqüe integration
The company also announced that its Uterqüe brand is going to be integrated within Massimo Dutti over the course of 2022.
Uterqüe’s full product range will only be available online and within select Massimo Dutti stores and no longer sold in standalone stores.
Inditex said the goal was to optimise Massimo Dutti’s “long-standing presence” in renowned international markets such as the US, Canada, Mexico and Turkey.
Zara flourishes
The company said that key brands such as Zara “continue to pursue” digital transformation strategies and open new flagship stores.
Zara opened impressive new UK outlets in Edinburgh and Cardiff during the second quarter, as well as refurbishing stores in Marbella and Seville, Spain.
The fashion retailer also added that Zara Man is set to launch a line of sportswear that will be available online and in selected stores from the end of September.
The collection is called Zara Athleticz and is based on three fundamental ideas: simplicity, comfort and functionality.