Companies

Inditex posts sales above pre-pandemic levels

Mar 18, 2022 Spain

The group reported revenue of 27.72 billion euros in 2021, despite COVID-19's impact in the first and fourth quarters. Online channel continues to gain track, representing 25.5% of total sales

The Spanish-based group noted that the performance through 2021 was still “shaped by the COVID-19 pandemic (…) In the first quarter, for example, store trading hours were 24% below capacity due to health restrictions”. However, once the pandemic retreated, sales bounced back, and Inditex posted record levels of earnings in both the second and third quarters.

The momentum continued into the start of the fourth quarter. The spread of the Omicron variant in mid-December “weighed on sales following the reintroduction of restrictions in most markets and lockdowns in Austria, Netherlands, Germany, Japan, China and the Philippines. The impact on the fourth quarter is estimated at around 400 million euros”.

Full Year Results

The group posted revenue of 27.72 billion euros in fiscal 2021, which reflects growth of 35.8%, on a comparable basis to the previous year. In local currencies, revenue was 3% above the one reached in 2019. Net profit rose by 193%, totalling 3.24 billion euros.

In 2021, revenue from online sales amounted to 7.5 billion euros, up by 14% as compared to the prior fiscal year “following strong growth of 77% in 2020. Online sales account for 25.5% of total group sales, and Inditex is expecting to reach 30% of total sales in 2024.

“The leadership demonstrated by the company in regard to its digital transformation all these years places us in an unrivalled position to offer an exceptional level of engagement with our quality and sustainable fashions”, added the group’s CEO, Óscar García Maceiras, singled out

Inditex posted gross margin of 57.1% last year, up by 123 basis points, on a comparable basis to fiscal 2020, “marking the highest level in six years”. EBITDA amounted to 7.18 billion euros, and EBIT came in at 4.28 billion euros, reflecting growth of 57.8% and 184.2%, respectively, as compared to fiscal 2020.

Fiscal 2022 Outlook

Store and online sales between the 1^st of February and the 13^th of March 2022 are tracking by 33%, as compared with the first quarter of 2021, which is also 21% above pre-pandemic levels. In this period, sales in store and online in the Russian Federation and Ukraine represented approximately 5% of sales growth.

Following the beginning of the conflict in Ukraine, Inditex chose to prioritize the safety of its workforce and closed its stores in the country. On the 5^th of March, the group halted altogether operations in Russia. “Our objective is to resume operations in Russia and Ukraine as soon as circumstances allow”, stated the CEO Oscar Garcia Maceiras in a news conference.

Image Credits: designscene.net

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