The Spanish clothing group Industria de Diseño Textil SA (Inditex) recovered well from the consequences of the Covid-19 pandemic in the 2021/22 financial year and achieved strong growth in sales and earnings. The high flight continued in the first few weeks of the current financial year, the parent company of brands such as Zara, Massimo Dutti, Pull & Bear and Bershka said on Wednesday.
In the financial year that ended in January, Inditex’s consolidated sales amounted to EUR 27.7 billion. It was 36 percent above the level of the previous year, which was shaped by the effects of the corona pandemic. Adjusted for exchange rate changes, the growth rate was 37 percent. The largest part of the total turnover was accounted for by the clothing chain Zara, whose revenues increased by 39 percent to 19.6 billion euros. Thanks to a strong increase in the second half of the year (+7.5 percent), consolidated sales exceeded the comparative figure for the pre-crisis year 2019/20 by three percent after currency adjustments.
The Group started the new fiscal year with strong sales growth
In addition to the significant growth in sales, a higher gross margin and a lower operating cost ratio contributed to the fact that the group was able to improve its earnings disproportionately. Earnings before interest, taxes, depreciation and amortization (EBITDA) increased by 58 percent to 7.18 billion euros compared to 2020/21. The net profit attributable to the shareholders reached a level of 3.24 billion euros and was thus almost tripled compared to the previous year (+193 percent).
In the current financial year, the group has been able to continue its upward trend so far. The current spring-summer collections have been “very well received” by customers, Inditex explained. Overall, currency-adjusted revenues for the period from February 1 to March 13 were 33 percent higher than the corresponding prior-year level and 21 percent higher than the comparative figure for 2020, the company said. Sales in Russia and Ukraine contributed about five percentage points to the growth.
The clothing retailer wants to stick to its strategy and announces price adjustments
The group emphasized that it also sees “strong growth opportunities” for the future and has further accelerated its “strategic initiatives to strengthen the global, fully integrated branch and online model”. In addition, sustainability and digitization are still at the heart of the strategy. “We plan to further develop these long-term key elements in order to maximize organic growth,” stated Inditex.
The clothing retailer announced that it would adjust its pricing policy accordingly in markets affected by temporary inflation in commodity prices or currency weakness in order to “protect margins”. In the current spring-summer season, these “targeted measures” are expected to ensure additional sales growth in the “mid-single-digit percentage range”, but will have no impact on the number of products sold, the group said.