Inditex profit jumps as sales surpass pre-pandemic levels

Inditex, the world’s largest clothing retailer, posted an 80 per cent increase in first-quarter net profit as sales surpassed pre-pandemic levels.

The owner of brands including Zara, Massimo Dutti and Pull & Bear said net sales for the three months from February to the end of April rose 36 per cent to €6.7bn as store footfall recovered sharply. Profit for the quarter was €760mn.

Online sales, which surged at the height of the coronavirus pandemic, dipped only 6 per cent year on year, the Spanish group said.

Óscar García Maceiras, chief executive, said the group’s performance was underpinned by a “well-differentiated business model” and “a strategic focus on innovation, digitalisation and sustainability”.

Net income would have risen to €940mn excluding a €216mn provision against 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 roughly 500 stores in Russia, its second-largest market in terms of shops.

Sales at the company’s 67 stores in China were affected by Covid-related restrictions, but the US cemented its position as the group’s second-largest market with “notable growth”, Inditex said.

Inditex recorded a gross margin of 60.1 per cent, the highest in a decade. Operating costs increased 24 per cent.

Under a three-year agreement worth more than €100mn signed in May, Inditex has committed to purchase 30 per cent of future production of a textile fibre called Infinna created from textile waste.

The company proposes to pay a total dividend of €0.93 per share from 2022 profits.