Inditex, the parent company of Zara, has announced impressive financial results for the third quarter of the fiscal year. During a presentation to analysts, CEO Óscar García Maceiras emphasized the company’s potential for growth and international expansion. Inditex achieved record-breaking figures with a 19% increase in turnover to 23.06 billion euros and a 24% increase in net profit to 3.2 billion euros in the first nine months of the year. The company attributes its growth opportunities to its global presence in 215 markets, low market share, and a fragmented sector. García Maceiras stated that the company aims to maximize organic growth and declared that their business model is operating at full speed.

Inditex’s CFO Ignacio Fernández applauded the company’s strong performance in the first three quarters, despite the challenging environment. The company experienced growth in both in-store and online sales across all regions, with the U.S. market ranking second in terms of sales volume, following Spain. The flagship brand Zara showed exceptional performance, contributing to robust sales across all retail channels. Although specific data on digital channel sales was not provided, Inditex mentioned that they were satisfactory and exceeded the same period last year.

Inditex has set a goal to increase its online channel turnover to 30% by 2024. The company has been expanding its physical stores globally and currently operates 6,307 points of sale worldwide. However, they also closed down 63 stores in the third quarter, with the most affected brand being Oysho. Zara’s network saw a decrease of 11 stores, while Bershka and Massimo Dutti had 12 closures each, and Pull&Bear had 8 fewer stores. Stradivarius remained constant with 920 points of sale.

Geographically, Inditex acknowledged that sales performance was impacted by various restrictions and lockdowns. Nevertheless, the company remains confident about its prospects in the Chinese market in the medium and long term. The Chinese market continues to be a priority for Inditex, despite the cautious approach within the sector. In the United States, another priority market, the company intends to maintain its current physical presence without expanding further. Inditex also accounted for charges in their earnings report due to their withdrawal from the Russian market, which represented more than 5% of their global turnover.

To mitigate the potential disruption in the supply chain, Inditex has temporarily increased inventory additions. They anticipate an ordinary investment of 1.1 billion euros for the year, with the currency impact on sales expected to be neutral. In terms of pricing, Inditex plans to raise prices progressively and selectively while safeguarding margins. The anticipated price increases will likely be limited to single digits.

Inditex’s executives reiterated the strength of their integrated model, which prioritizes creativity, design, quality, sustainability, and optimized customer experience. The company intends to continue investing in business development and offering a unique, cutting-edge fashion selection. They also revealed plans to open flagship stores in strategic locations, including the upcoming Zara store on the Champs Elysées in Paris. The CEO further disclosed their intention to expand the Zara Pre-Owned program to more key markets in the following year. Launched in the UK last November, the initiative provides repair, resale, and rental services for Zara garments.

Useful links:
Inditex Official Website
Zara Official Website