Inditex, the renowned fashion retail giant, has recently released its nine-month and third-quarter results, indicating a remarkable recovery in its business. The company’s strategic shift towards a fully integrated digital and sustainable business model is also progressing rapidly. In the third quarter, both net income and pre-tax profit reached record highs, showcasing substantial growth compared to the pre-pandemic period in 2019. Additionally, sales growth in constant currency during the three months ending in October increased by 21% year-on-year and 10% compared to 2019.

Despite operating with 11% fewer stores, Inditex witnessed store sales surpassing 2019 levels in the third quarter, signaling a strong performance for its seasonal collections. Even more impressively, when combining sales from both physical stores and online channels in the fourth quarter, from 1 November to 10 December, Inditex experienced a remarkable 33% increase compared to the same period last year. These sales also maintained the 10% increase observed in the third quarter when compared to 2019.

Taking into account the overall performance of the nine-month period, Inditex reported total net sales of €19.3 billion, showcasing a 37% increase from the previous year, or a 39% increase on a constant currency basis. Although slightly lower than the €19.8 billion reported in 2019, it is important to acknowledge the impact of temporary store closures due to the pandemic. However, online sales continued to display robust growth, with a 28% increase in constant currency compared to the previous year and an impressive 124% increase compared to two years ago. As a result, Inditex expects online sales to represent over 25% of its total sales for the current financial year.

The company’s gross profit for the nine-month period stood at €11.4 billion, marking a significant 40% increase compared to the previous year, with a gross profit margin of 59%, representing a 101 basis point increase. Furthermore, the nine-month EBITDA rose by 63% to €5.4 billion, while EBIT experienced a substantial 248% increase, amounting to €3.3 billion. Pre-tax profit and net income also witnessed significant growth, increasing by 277% to €3.2 billion and 273% to €2.5 billion, respectively. Although net income has not yet reached its 2019 level of €2.7 billion, the company’s progress in sales during the third and fourth quarters suggests that it is on track for a strong recovery.

Inditex also noted that the currency impact on sales in the second half of the year is projected to be around +0.5% compared to the second half of 2020 and -5.5% compared to 2019. Moreover, the migration to the Inditex Open Platform (IOP) is nearly complete, with approximately 97% of the process finished, and all stores are currently operational. Sales are gradually returning to normal levels, with continued growth in online sales. Inditex’s successful recovery and strong performance highlight its resilience and ability to adapt to evolving market dynamics while maintaining a steadfast focus on sustainability and digital integration.

Useful Links:
1. Inditex Official Website
2. Inditex Open Platform