Spanish fashion group Inditex sees its profits grow as fashion sales are picking up again in most countries. The impact of lockdowns in China and the war in Ukraine remains limited for the parent company of Zara and Massimo Dutti,.
Second quarter starts strongly
Inditex realised a turnover growth of 36 % to 6.74 billion euros in the first quarter, better than before the pandemic. The net profit rose by 80 % to 760 million euro. Zara’s parent company sees consumers replenishing their wardrobes after two years of forcibly sitting at home. Strong figures, although they are still slightly below the expectations of analysts.
The fashion group was able to offset rising costs by raising prices. The recovery in the European and American markets partly compensated for lost sales in Russia, where the group closed 502 stores following the Russian invasion of Ukraine. The war will cost the fashion group some 216 million euros: Russia was the second largest market for the company, accounting for 10 % of sales.
The lockdowns in China are now as good as over, the fashion company reports: 67 stores were closed during the first quarter, but now only four of them are closed. The second quarter also got off to a strong start, with organic sales up 17 % in the period to 5 June.