The fashion giant Inditex shot the net profit 193% at fiscal exercise ended on January 31 to 3,243 million euros. The sales they rose 36%, to 27,716 million euros. For the president of Inditex, Paul Island, who will officially leave the multinational on April 1 and hand over operational management to Óscar García Maceiras, “after two years of the pandemic, these results demonstrate the great capacity to adapt to any circumstance.” For García Maceiras, these Benefits respond to the successful digital commitment of recent years.
The sales at constant exchange rate They exceeded 2019 revenue by 3%, although they remain 2% below from an accounting point of view. The net financial position reaches a historical maximum of 9,359 million euros, after a growth of 24% in the year, which outlines the considerable lung of the company to face a complicated 2022.
During exercise, Inditex It has opened 226 stores in 40 markets, although it is the online bet that most clearly reflects the group’s transition. Store and online sales between February 1 and March 13 grew 33% compared to the same period in 2021 and 21% compared to the pre-covid record highs of 2019. In this period, sales in stores and online in the Russian Federation and Ukraine accounted for about five percentage points of sales growth.
Online sale’
Online sales grew to 7,500 million euros, which now represents 25.5% of total sales. They are expected to account for 30% of the total in 2024. In 2021, Inditex reached 228 million followers on social networks, with 6.2 billion visitors to its brands online.
The board of directors will propose to the shareholders’ meeting a dividend of 0.93 euros per share, which is 33% more than in 2020, made up of an ordinary dividend of 0.63 euros and an extraordinary dividend of 0.30 euros per action. The board has also set an extraordinary dividend of 0.40 euros per share for the year 2022, payable in 2023.
Inditex had 165,042 employees as of January 31, 2022, compared to 144,116 a year earlier, thanks to the gradual normalization of business hours still influenced by the pandemic.
The relay
The 2021 results presentation is especially relevant due to the relay at the top of the Galician giant, which will officially take place on April 1, when Martha Ortega, daughter of the founder assumes the succession in the business kingdom. That April 1 Ortega takes possession of the presidency of the multinational, while Óscar García Maceiras will continue to hold the position of CEO assumed in November. Pablo Isla leaves a company in convulsive international times, but a good part of his objectives remain among his achievements, mainly the restructuring of stores with the implementation of online sales and the consolidation of the technological model.
Isla’s love-hate relationship with the stock market and analysts deserves a separate mention, the most uncontrolled chapter and that the manager coped with ease but less effectively. The price of Inditex shares has fallen almost 70% from the highs of 2017. For this year 2021 ended on January 31, analysts had forecast profits of around 3,000 million euros and sales of 25,000 million, 20% less than before the pandemic. In 2019 Inditex earned more than 3,600 million euros. Analysts fell short again this year.
The great challenge is to manage to maintain the Island’s figures at a time that begins with the war in Ukraine as a backdrop and increases in logistics costs that will have to be passed on in some way; or in sales prices to the public or in new management efficiencies that go through parallel cost reduction.
Investments
In 2022, an investment of 80 million euros will be made to increase the capacity of the Europe Platform, located in Zaragoza, which distributes Zara garments by 20%. On the other hand, a newly created 170,000 square meter building will be the base for Zara’s commercial and design teams at the Inditex headquarters in Arteixo. With an investment of 238 million euros, the works began in January and are expected to be completed in approximately two years
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The commitment to sustainability continues, along the lines of achieving 100% coverage of Inditex’s energy consumption this year, either with renewable sources (which will be achieved this year) or reducing the industrial impact of fashion. The plan is that in 2040 the company’s net emissions are zero.