PARIS – Continuing its climb, sales at Zara parent company Inditex were up 16.6 percent in constant currency in the first half of the year over the same period in 2022 to 16.9 billion euros.
The Spanish company’s gross profit topped 9.8 billion euros, growing 14.1 percent year-over-year.
“The first-half results demonstrate that the talent of our teams continues to consolidate the improvements in the performance of our business model. The ongoing commitment to creativity, quality and customer experience, as well as the determined progress in sustainability, drives a strategy that is taking our business to the next level,” said Inditex chief executive officer Óscar García Maceiras.
The group has added 625 stores in the last year, including 161 outposts of its flagship Zara mark, in 213 markets. Openings of new stores have been carried out in 20 markets. The company now operates 5,745 stores across its brands, including Pull& Bear, Massimo Dutti, Bershka, Stradivarius, Oysho and Zara Home.
The strength of the first half is continuing apace, with sales in the end of summer and beginning of fall season from Aug. 1 to Sept. 11 up 14 percent year-over-year. The company also touted its continuing fashion evolution, with partnerships including Zara’s collaboration with Steven Meisel.
The company has also asserted better control of its supply chain, reducing inventory 6.9 percent while raising prices and increasing store footprint in key markets with a new design concept in key locations including Paris; Rotterdam, the Netherlands; Dubai; Sao Paulo, Brazil, and Shenyang, China.
Berksha’s Milan Vittorio Emanuele and Stradivarius’ Barcelona Paseo de Gracia stores were enlarged, too.
Inditex’s results slightly beat analyst forecasts, with sales ahead of estimates by about 1 percent.
“We view Inditex as a strong omnichannel fashion retailer, which historically has benefited from its speed to market and product department-driven manufacturing process,” said RBC analyst Richard Chamberlain in a note following the results’ release. The company’s inventory reduction, as well as the roll out of new technology, including RFID tags and investment in omnichannel, has helped boost investors’ confidence, he added.
Those tags, which the company has touted as an alternative to hard plastic tags, are being tested in key markets and will roll out globally by the end of 2024, the company said.