Business

Profits at Zara owner Inditex jump 27% as sales exceed pre-pandemic levels

In-store and online sales for the world’s biggest fashion retailer reached €32.6 billion

Profits at Zara owner Inditex, the world’s largest clothing retailer by sales, jump 27 per cent. Photograph: Brent Lewin/Bloomberg

Wed Mar 15 2023 - 08:26

Zara owner Inditex on Wednesday posted a 27 per cent increase in net profits in 2022 as sales exceeded pre-pandemic levels in the first full year since Marta Ortega, daughter of founder Amancio Ortega, took over as company chair.

In-store and online sales for the world’s biggest fashion retailer reached €32.6 billion, 18 per cent more than the €27.71 billion posted the year earlier and 15 per cent higher than in 2019, before the pandemic hit.

The Spanish group, whose brands also include Massimo Dutti and Pull & Bear, said sales continued to rise during the first weeks of its fiscal year that started on February 1st.

Between February 1st and March 13th, Inditex said its sales jumped by 13.5 per cent from the same period a year earlier.

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The 2022 revenues were in line with analysts’ expectations as the company benefited from shoppers’ appetite for fashion as Covid-19 lockdowns ended.

Demand for Zara’s clothes continued even after a price rise of 5 per cent or more early last year to mitigate inflation, according to analysts at Deutsche Bank, UBS and Royal Bank of Canada.

The results may also lessen investor doubts about Marta Ortega succeeding the veteran Pablo Isla as non-executive chair in April, in a generational handover that began a decade ago when her father retired.

Excluding the Russian operation, where its stores have been closed since the Ukraine conflict started just over a year ago, sales in the February 1st to March 13th period increased in constant currency by 17.5 per cent.

Also on Wednesday, rival H&M reported a 12% increase in net sales for its December-February period. - Reuters

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