The first semi-annual accounts of Inditex they defy inflation and the ghosts that point to a drop in consumption. The textile giant has beaten market forecasts again this year and has achieved record figures for sales, operating income and profits in its first fiscal half. With Martha Ortega already seated in the presidency together with Oscar Garcia Maceiras as CEO, the Spanish listed company has presented figures that exceed the expectations expected by some analyst houses in recent days.
Sales of the company that owns Zara, Massimo Dutti, Bershka and Oysho reached around income of 14,485 million euros, 24.5% more than in the same period of the previous year. The figure is again above that registered in the same period of the last year without a pandemic, according to the information sent this morning to the National Securities Market Commission (CNMV). In the closed fiscal quarter, which only measures the sales registered during May, June and July, the company has entered 7,743 million euros.
A large part of these figures correspond to physical sales, which were achieved with a park of stores 6,370 establishments, a figure lower than that recorded in the previous quarter (6,654). By brand, all the Inditex banners improve their numbers, except for Oysho, which reduces its sales by 4%. By contrast, Zara -including Zara Home-, Massimo Dutti and Bershka improve their figures with a double-digit increase.
Inditex also recorded unprecedented figures in its operating result and in the final net profit. Ebitda grew by 30%, to 4,029 million euros, and final profits were 1,794 million euros, 41% more. The company recalls that it has been forced to provision for the impact of its departure from Russia due to the war in Ukraine, with an extraordinary charge of 216 million euros that was already included in first quarter accounts.
Oscar García Maceiras explained to the stock market regulator that these results are explained by four key factors in the group’s performance. And he lists: “Our fashion proposal, a constantly optimized shopping experience for our customers, our focus on sustainability and the talent and commitment of our people.” Regarding the business model, he states that “it’s working at full capacity and has great potential for future growth.
Regarding the forecast for the coming months, the company has not ventured excessively and has pointed out that the following figures to be disclosed will be presented in the month of December. Beyond July, one of the updated figures has been that of the inventory for the autumn and winter collection, which as of September 11 has levels 33% higher. The company thus justifies itself in the face of the possibility of tensions occurring in the supply chain in the remainder of 2022. For now, these collections “have been very well received by our customers”, as try the 11% increase during August and September in store sales and on the internet about the record period of 2021.
Inditex’s results have been above the figures that the market consensus predicted in recent days on its sales (7,170 million). After the halfway point of its fiscal year (between February and July), it remains to be seen what the performance of the business will be in the coming months, where it is predicted a slowdown in the global economy. Some rivals are already being singled out as possible victims. Like AB Foods, the parent company of Primark, to which Deutsche Bank pointed out by the reduction of the margins of the clothing chain.
On the figures presented this Wednesday, Bankinter has already ruled in its daily report. He acknowledges that sales are beating expectations, but stresses the challenges ahead. “The pattern of deceleration is clear”, he affirms regarding sales, while at the same time stressing other indicators such as the gross margin, which back in your second trimester “reflecting greater difficulty in translating cost increases into prices.” The bank’s analysts consider that “it will be more difficult to transfer cost increases to prices without destroying demand” or “causing a shift in purchases towards cheaper brands or products.”