Inditex, the world’s largest apparel retailer, posted an 80% increase in net profit in the first quarter as sales surged above pre-pandemic levels.
The owner of brands such as Zara, Massimo Dutti and Pull and Bear said net sales for three months, from February to the end of April, increased by 36% to 6.7 billion euros, as store footfall took strongly picked up. The profit for the quarter amounted to 760 million euros.
Online sales, which exploded at the height of the coronavirus pandemic, were down just 6% year-on-year, the Spanish group said.
Óscar García Maceiras, chief executive, said the group’s performance was supported by a “well-differentiated business model” and “a strategic focus on innovation, digitization and sustainability”.
The net result would have reached 940 million euros excluding a provision of 216 million euros on the estimated costs related to Ukraine and Russia. The group said Inditex stores in both countries, including its online platforms, had been “temporarily closed” since February 24, the date of the Russian invasion.
The company has around 500 stores in Russia, its second largest market in terms of stores.
Sales at the company’s 67 stores in China were hit by Covid-related restrictions, but the United States consolidated its position as the group’s second largest market with “notable growth”, Inditex said.
Inditex posted a gross margin of 60.1%, the highest in a decade. Operating costs increased by 24%.
As part of a three-year deal worth more than €100 million signed in May, Inditex has pledged to buy 30% of future production of a textile fiber called Infinna created entirely from textile waste.
The company proposes to pay a total dividend of €0.93 per share on 2022 earnings.