Inditex (Zara) has never made so many profits

Inditex (Zara) has never made so many profits
Inditex (Zara) has never made so many profits

Still no competition for Inditex. The world leader in ready-to-wear, chaired by Marta Ortega, daughter of the Spanish multi-billionaire founder Amancio Ortega, obtained 1.68 billion euros in net profit in the third quarter (which ended on October 31 due to ‘a staggered exercise), according to the results published by the company. Or 6% more than the 1.59 billion euros for the third quarter of 2023.

This result is quite simply the highest ever recorded by the group in a quarter. But it is, however, slightly lower than the forecasts of analysts surveyed by the financial information provider Factset, who expected on average 1.77 billion euros in net profits.

In total, over the first nine months of the year, the profit of the cheap fashion giant, owner of seven brands including Zara, Bershka, Massimo Dutti and Stradivarius, amounts to 4.45 billion euros, compared to 4.1 billion over the same period of 2023.

Dynamic sales

To achieve such figures, Inditex was able to count on particularly dynamic sales this year. These reached 27.42 billion euros over nine months (+7%), “both in its stores and on the Internet”underlines the company.

Above all, the Spanish juggernaut believes it has maintained “very satisfactory margins”thanks to its strict cost control policy. Since the start of its financial year, the group based in Galicia, in the north-west of Spain, has seen its gross margin increase by 7.2%, to 59.4% of its turnover.

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So many indicators that allow the inexpensive fashion giant to be optimistic for the months to come. Especially since its sales have continued to grow in recent weeks – +9% year-on-year at constant exchange rates for the period from November 1 to December 9 – despite a complex environment.

A textile industry under pressure

For several years, the textile industry has been under pressure, faced with the rise of ultra-low-cost brands such as the Chinese brand Shein or the Irish company Primark, which are destabilizing traditional ready-to-wear players. But this increased competition does not seem to affect the Galician group, whose results have now been increasing for 15 consecutive quarters.

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More than ever, Inditex has established itself as the leader in the sector with 170 billion euros in market capitalization. Its stock has even jumped 44% over the past year. The group today has 165,000 employees worldwide.

(With AFP)

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