Zara Parent Company Inditex Net Profit Up 22 Percent in Q3 – WWD

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PARIS – Zara parent Inditex generated record profits in the third quarter.

In the three months to Oct.31, the fast-fashion behemoth’s net profits climbed 22 percent to 1.59 billion euros year-over-year. Sales rose 14 percent in constant currency for the period between Nov. 1 and Dec. 11 heading into the holiday shopping season.

Looking at the first nine months of the year, sales were up 14.9 percent in constant currency year-over-year to 25.6 billion. Inditex rang up profit of 4.1 billion euros in the period.

The results were just ahead of analyst forecasts, which RBC analyst Richard Chamberlain chalked up to its strong omnichannel development and investment in tech, such as RFID tags.

“We view Inditex as a strong omnichannel fashion retailer, which historically has benefited from its speed to market and product department-driven manufacturing process,” he said in a note. “Inditex’s strong sales densities have enabled it to earn a mid- to high-teens margin historically, which we think it can maintain…We think ITX’s outperformance is likely to continue in H2.”

In the first nine months of the year, Inditex opened 585 stores across it seven brands. Inditex operates Bershka, Pull&Bear, Massimo Dutti, Oysho, Stradivarius and Zara Home in addition to its core Zara brand. It opened 161 Zara stores and is moving into new markets, including opening the first Stradivarius stores in German cities Stuttgart and Dresden.

The company is also focusing on China, launching a new weekly livestream experience on Douyin social media there. The livestream runs for five hours and includes catwalks, walkthroughs of the fitting rooms and makeup area, and “behind-the-scenes” views of the camera equipment and staff. This will be available soon in other markets.

Inditex said sales continue their strong pattern, showing very satisfactory development both in stores and online. Sales were positive in all geographical areas and across all brands.

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