Inditex owner Zara posts a robust first-quarter performance.
Zara Profits Flourishing With New Boss Marta Ortega
Spanish fashion giant Inditex has posted a strong performance in its first quarter, with double-digit sales and profit growth.
Spanish fashion giant Inditex, which owns fashion brands Zara, Bershka and Oysho, revealed sales grew 13% to €7.6bn in the first quarter of 2023, with positive growth in all of its 213 markets.
Gross profit increased 14% to €4.6bn, with gross margin reaching 60.5%. And EBITDA rose 14% to €2.2bn, with net income up 54% to €1.2bn. Inditex said due to the strong operating performance cash from operations has increased markedly too, with its net cash position jumping 14% to €10.5 billion.
All eyes have been on Inditex this last year, as new boss Marta Ortega, the daughter of Inditex founder Amancio Ortega – became chair of the group in April 2022. With whispers of nepotism from the industry and what her new leadership could mean for the business.
But the proof is in the pudding! These excellent results show Ortega has blown her critics out of the water and her passion for retail is clearly in the blood.
Off the back of its first quarter performance, shares at Inditex rose 6% in Spain to €33.65, as the group continues to see strong growth opportunities in its future outlook.
Inditex says its spring/summer collections continue to be very well received by its customers, with online and store sales in constant currency growing 16% between May and June 4, compared to the same period in 2022.
Planning for Profit: The Next Moves for Inditex
To drive long-term growth in the business, the group says it will be prioritising 3 areas:
1. Improving the fashion proposition
“We continue focusing on the creativity, innovation, design and quality of all our collections and integrated sales channels, while reinforcing the commercial initiatives of all our concepts. Zara Woman Atelier, Massimo Dutti Moment de Detente or Casa Stradivarius are just some of the creative proposals available throughout 2023.”
2. Enhancing the customer experience
“To continue offering the best customer experience both in our stores and on our online platforms we are developing several initiatives:
New Zara store design: A key recent project has been the new store design for Zara created by our Architectural Studio that integrates organically the most sophisticated interiors with the functional and digital sections, like fitting rooms, self-checkout areas, click & collect points, in-store silos and stockrooms.
This new Zara store design is featured in openings, enlargements or relocations such as Paris Champs Elysees, London Stratford, Miami Dadeland, Mumbai Phoenix Palladium and Johannesburg Sandton.
New security technology in stores: The hardware to implement the new security technology and eliminate hard tags will be available in all Zara stores globally by July with the aim to start test operations in the 2023 Autumn/Winter season.”
3. Increasing its focus on sustainability
“Sustainability is a key part of Inditex’s strategy. As per the Sustainability Roadmap Goals, Inditex is on track to deliver upon all of the targets set for 2023 to 2025. We continue deepening our sustainability strategy and we will present at the next AGM new commitments that demonstrate our ambition in this area.
In 2022, Inditex made an investment in Circ, the fashion technology company that recycles textile waste back into new fibres, aimed at accelerating industrial-scale solutions towards circularity in the fashion sector.
In April, Zara partnered with Circ to launch a first-of-its-kind women’s capsule collection made using recycled polyester and lyocell derived from the separation of polycotton textile waste.
In terms of circularity, the Zara Pre-Owned platform, currently available in the United Kingdom, will reach France, Germany and Spain in the second half of 2023. Through this platform, we will continue helping our customers to extend the life cycle of their Zara garments through donation, repair or resale.
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