Inditex, the Spanish fashion powerhouse, has announced its full-year results for 2019 and showcased its strength as a top performer. However, the company acknowledges the challenges brought on by the coronavirus pandemic and expects a significant impact on its future position. The fashion industry is currently suffering from store closures mandated by governments in key European markets, including France, Italy, and Spain, as well as declining footfall in other countries.

Despite these challenges, Inditex remains optimistic about its online business, which continues to operate normally in all markets. This positive news suggests that other fashion retailers may also see some level of economic activity, even in the midst of consumer caution. Furthermore, Inditex reports that its supply chains are functioning normally, and its initial spring and summer collections have been well received by customers.

However, overall sales have experienced a decline of 4.9% in local currencies from February 1 to March 16, with a significant drop of 24.1% since the beginning of March. Currently, 3,785 stores in 39 markets are temporarily closed, although the majority of stores in China have reopened. This provides a glimmer of hope that Europe and other regions may gradually return to normality in the coming months.

Despite the overshadowing impact of the coronavirus, Inditex’s full-year results for 2019 are still impressive. Net sales increased by 8% in local currencies and on a reported basis, reaching €28.3 billion. Online sales experienced significant growth, rising 23% to €3.9 billion, accounting for 14% of net sales. Gross profit increased by 7% to €15.8 billion, although the gross margin declined by 79 basis points to 55.9%. However, without an inventory provision made to account for the impact of the pandemic, gross profit would have been 9% higher, and the gross margin healthier.

Inditex’s EBITDA rose to €7.6 billion from €5.5 billion, and net income grew by 6% to €3.6 billion. These figures would have been even more impressive if not for the one-off provision related to the pandemic.

Overall, Inditex’s performance in 2019 exemplifies its resilience and success in the fashion industry, with like-for-like sales increasing by 6.5%. The first half of the year saw a 5% increase, followed by a 7.5% rise in the final six months. Despite the challenges posed by the coronavirus, Inditex remains a robust player in the industry.

Useful links:
– [The Impact of the Coronavirus on the Fashion Industry](
– [Inditex Online Store](