Inditex registered a net profit of 3,095 million euros during the first nine months of its 2022-2023 fiscal year (between February 1 and October 31), which represents an increase of 24% compared to a year earlier, according to The company reported this Wednesday.
Group sales amounted to 23,055 million euros, 19% more than in the same period of 2021 (20% at constant exchange rates) and were positive in all geographical areas.
In this way, Inditex reaches its all-time high in sales and profit in a third quarter, after achieving a quarterly profit of 1,305 million and sales of 8,211 million, 11% more.
Gross margin stood at 13,532 million euros, 19% higher than a year earlier, and represents 58.7% of sales.
Likewise, the gross operating result (Ebitda) grew by 20% to 6,520 million euros and the net operating result (Ebit) by 27% to 4,177 million euros.
In the third quarter of its fiscal year, a charge of 14 million euros has been included in ‘Other results’, in addition to the extraordinary charge of 216 million euros recorded in the accounts for the first quarter.
Inditex estimates that this provision “substantially” covers the impact of the Group’s cessation of activity in the Russian Federation.
“In a very demanding environment, these results clearly show the strength of our unique model: collections with a high fashion component, an attractive shopping experience and a highly committed human team to achieve profitable and more sustainable growth”, highlighted the CEO of Inditex, Óscar García Maceiras.
Throughout the first nine months of its fiscal year, store traffic and sales have grown significantly and the differentiation of Inditex stores has been key, as the company has emphasized.
Online sales continue to progress “satisfactorily” and are above the record reached a year earlier.
The group has also highlighted that the control of operating expenses has been “rigorous”. Operating expenses have increased by 17% compared to a year earlier, below the growth in sales, while net cash has reached 9,980 million euros.
In the first nine months of its fiscal year, Inditex opened in 30 markets and at the end of the period it had 6,307 stores.
Likewise, Inditex has temporarily anticipated inventory entries in 2022 to increase product availability in the face of possible tensions in the supply chain.
Inventory as of October 31, 2022 grew by 27%. The fall-winter inventory is considered to be of high quality and as of December 8 of this year, inventory levels show an annual growth of 15%.
FORECASTS
On the other hand, store and online sales at a constant exchange rate between November 1 and December 8 of this year grew by 12% compared to the same period in 2021.
Inditex has stressed that it continues to see “strong” growth opportunities.
The priority lines of action are: continue to improve the fashion proposal, constantly optimize the customer experience, maintain the focus on sustainability and preserve the talent and commitment of people.
The development of these lines will continue to drive organic growth in the long term.
“The flexibility and responsiveness of the business, coupled with seasonal, proximity sourcing, allows for rapid reaction to fashion trends and a unique position in the market. Our fully integrated business model has great growth potential” , has underlined the signature.
The group’s future growth, as he explained, is based on investment in stores, developments in the online sales channel and improvements in logistics platforms, with a clear commitment to innovation, technology and sustainability.
Inditex expects online sales to exceed 30% of total sales in 2024 and we estimate that ordinary investment in 2022 will be approximately 1,100 million euros.
At current exchange rates, Inditex expects a neutral currency impact on sales in 2022. Based on the information available, Inditex expects a stable gross margin (/-50 basis points) for 2022.
