The Spanish clothing group Industria de Diseño Textil SA (Inditex) closed the first half of the 2022/23 financial year with strong growth in sales and earnings. This emerges from an interim report published on Wednesday by the parent company of brands such as Zara, Massimo Dutti, Pull & Bear and Bershka. The company was also able to increase its revenues in the first few weeks of the second half of the year.
In the months of February to July, group sales amounted to around 14.8 billion euros. It thus exceeded the level of the same period of the previous year by 24.5 percent. Adjusted for exchange rate changes, revenues grew by 25 percent. The Zara division, which includes the Zara Home concept as well as the clothing chain of the same name, developed at an above-average rate. Their turnover was 10.9 billion euros, which corresponds to an increase of 29 percent compared to the first half of 2021/22.
High sales plus and cost discipline inspire the result
Almost all of the other Group brands were also able to make strong gains. Pull & Bear achieved an increase of 19 percent to 936 million euros, Massimo Dutti increased by 10 percent to 721 million euros, Bershka by 15 percent to 1.05 billion euros and Stradivarius by 17 percent to 913 million euros. Only the Oyshko label went down, with sales falling by four percent to EUR 293 million.
Thanks to a slightly improved gross margin and “stricter cost controls”, the group was able to increase its earnings even more than sales. Earnings before interest, taxes, depreciation and amortization (EBITDA) grew by 30 percent to 4.03 billion euros, operating profit (EBIT) reached 2.43 billion euros and exceeded the level of the same period last year by 44 percent, although Inditex had to post a one-off charge of EUR 216 million as a result of the withdrawal from Russia and Ukraine. The bottom line was net income attributable to shareholders of 1.79 billion euros, an increase of 41 percent compared to the first half of the previous year.
Inditex remained on course for growth in the first few weeks of the second half of the year
CEO Óscar García Maceiras saw the surprisingly strong growth, with which Inditex was able to achieve “historic highs” in sales and profits, as confirmation of the strategic orientation of the group: “The results can be explained by four factors that are decisive for our performance: our unique product range, a constantly optimized shopping experience for our customers, our focus on sustainability and the talent and commitment of our employees,” he said in a statement. “Our business model is evolving at top speed and offers great growth potential for the future.”
The clothing supplier also made a successful start to the second half of the year. In the period from August 1 to September 11, currency-adjusted revenues were eleven percent above the level of the same period last year, Inditex explained. According to its own statements, the group has already prepared for possible disruptions in the supply chain in the course of the second half of the year by procuring autumn/winter goods at an early stage. Inventories are therefore currently 33 percent higher than a year ago, the company said.