With a profit of 4,130 million, 27% more, and sales of 32,569 million, 17.5% higher than a year earlier
Inditex recorded a record net profit of 4,130 million euros in its 2022-2023 fiscal year (from February 1, 2022 to January 31, 2023), the first for Marta Ortega as president, which represents an increase 27% compared to the previous year, as reported by the company, which will raise the dividend by 29%, up to 1.2 euros per share, which represents a disbursement of more than 3,700 million.
Sales were also record, reaching 32,569 million euros, 17.5% more than in 2021, with an increase of 18% at constant exchange rates.
Sales grew in all geographical areas, both in physical stores and ‘online’ and in all concepts.
Specifically, ‘online’ sales grew “satisfactorily” over the record figure of 2021, reaching 7,806 million euros.
In this way, the company achieves historical figures by exceeding the profit achieved in 2019, prior to the pandemic, in which it earned 3,639 million euros, and sales of 28,286 million euros.
“The excellent results of 2022 show the strength of our business model and its ability to move towards the next level of development, in which our fashion proposal, the experience of our clients, the commitment to sustainability and the talent of our teams will continue to be key”, highlighted the CEO of Inditex, Oscar García Maceiras.
The operating result (Ebitda) grew by 20%, to 8,649 million euros, and Ebit by 29%, to 5,520 million euros.
The profit before taxes, for its part, increased by 28%, up to 5,358 million euros, while the gross margin stood at 18,559 million euros, 17% higher than in 2021, and represents 57% of sales .
Due to the good execution of the business model, funds generated (adjusted for lease payments) grew by 18%, while net cash grew by 8%, to 10,070 million euros.
Store sales increased by 23% in 2022 due to the growth in commercial traffic and the increasing productivity of stores. This “strong” growth, according to the company, has been achieved with 10% fewer stores and 6% less commercial space than in 2021.
“Our continuous focus on the optimization and digitization of stores continues to be key,” they have highlighted from the company, which in 2022 opened stores in 33 markets.
The group remained “very active” in store optimization activities (201 openings, 186 renovations including 94 expansions, and 349 takeovers). At the end of the 2022 financial year, Inditex operated 5,815 stores.
In 2022, Inditex’s gross space has increased by 4.5%, while net space, which includes takeovers, fell by 6%.
Given possible tensions in the supply chain during the 2022 financial year, Inditex temporarily accelerated inventory entries in the first nine months of the year to increase product availability, without making any changes to the commitment levels.
“The collections were of high quality and generated strong sales conversion,” the company stressed.
Due to the strong sales performance during 2022 and a progressive normalization of supply chain conditions at the end of 2022, inventory levels gradually normalized and as of January 31, 2023 they were only 5% higher than those of a year before.
INVESTMENT OF 1,415 MILLION
Investment in fiscal year 2022 amounted to 1,415 million euros, of which 192 million euros correspond to extraordinary investments linked to multi-year projects.
Looking ahead to the coming years, in physical stores, the Inditex chains will reach new markets (Stradivarius in Germany, Oysho in the United Kingdom) and new locations (Zara in Champs Elíseos-Paris, or in Plaza del Duque-Seville).
Additionally, it will carry out expansions and reforms in some of its most emblematic stores (Zara Rue de Rivoli-Paris, Zara Stratford-London or Bershka Vittorio Emanuele-Milan).
Likewise, the company has highlighted that it sees “great opportunities” for long-term growth in the United States.
Between 2023 and 2025, Zara will undertake at least 30 projects in the United States (new stores, relocations and expansions), in cities such as New York, Los Angeles, Miami, Chicago, Boston, Dallas, Austin and Las Vegas.
Along with this, it will introduce a new security technology in its stores from 2023 that will allow it to eliminate hard alarms.
“Inditex is present in 213 markets, with a low market share in each of them and in a highly fragmented sector, so we see strong growth opportunities. We continue to estimate strong sales productivity in our stores in the future. The growth of Gross space in 2023 will be around 3%,” the company highlighted.
HISTORICAL DIVIDEND
Likewise, the board of directors will propose to the general meeting of shareholders a 29% increase in the dividend for the year 2022 up to 1.20 euros per share, made up of an ordinary dividend of 0.796 euros and an extraordinary dividend of 0.404 euros per share.
The dividend is made up of two equal payments: on May 2, 2023 a payment of 0.60 euros per share, corresponding to the ordinary dividend, and on November 2, 2023 a payment of 0.60 euros per share (0.196 ordinary euros plus 0.404 euros extraordinary).
Inditex’s dividend policy consists of an ordinary ‘payout’ of 60% of the profit and the additional distribution of extraordinary dividends.
Compared to the beginning of fiscal year 2023, sales in stores and ‘online’ at constant exchange rates between February 1 and March 13, 2023 increased by 13.5% compared to the same period in 2022.
Adjusting for operations in the Russian Federation and Ukraine during 2022 (February 1 to March 13), store and online sales at constant exchange rates increased 17.5%.
