Inditex, the parent company of popular fashion brands Zara, Bershka, Massimo Dutti, and Pull&Bear, released its financial results for the second quarter and six months ending July 31. The highlights are as follows:
Impressive Sales Performance
In a major boost for the Spanish fashion giant, sales for the six-month period reached a staggering €16.85 billion ($18.12 billion), surpassing the €14.85 billion reported in the same period last year.
Robust Earnings Growth
Inditex's net profit for the first half of the year rose to €2.51 billion, compared to €1.79 billion in the previous year. Earnings before interest and taxes also saw a significant increase, reaching €3.16 billion from €2.43 billion. Moreover, earnings before interest, taxes, depreciation, and amortization climbed to €4.66 billion, up from €4.03 billion.
Margins on the Rise
Inditex witnessed a notable improvement in its operating margin, which jumped from 16.4% to 18.8%. Additionally, the gross margin demonstrated an upward trend at 58.2%. The company anticipates maintaining a stable gross margin for the full year, with a range of plus or minus 50 basis points.
Outperforming Industry Peers
Investors were closely monitoring Inditex's first-half results against industry backdrop concerns regarding weakening demand and pricing pressures. However, the company's Autumn/Winter collection recorded robust customer reception, with both in-store and online sales in constant currency achieving a remarkable 14% growth between August 1 and September 11. In contrast, AB Foods recently revised sales guidance for its fast-fashion retailer Primark, projecting improved profitability despite challenging market conditions. The spotlight now shifts to H&M Hennes & Mauritz, based in Stockholm, which is expected to announce its sales figures on Friday.
In conclusion, Inditex's impressive financial results underline its strong market position and continued growth trajectory.