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Image: Zara

Zara owner Inditex swings to Q1 profit as sales rebound

By Huw Hughes

Jun 9, 2021

Spanish fashion giant Inditex has reported soaring sales in the first quarter of the year as it swung to a profit.

For the three months ended April 30, sales soared 50 percent to 4.9 billion euros compared to last year when the company was hit hard by global store closures amid the first wave of the pandemic.

Compared to pre-Covid 2019 levels of the same quarter, sales were down just 11.5 percent despite 24 percent of trading hours being unavailable due to lockdowns and restrictions, with 16 percent of its stores still closed at the end of the quarter.

Signs of recovery

The group, which owns Zara, Massimo Dutti, and Pull & Bear, said store sales “steadily” improved during the quarter and online sales in constant currency increased 67 percent.

The company swung to a net income of 421 million euros in the quarter compared to a loss of 409 million euros last year.

EBITDA was 1.2 billion euros compared to 484 million euros a year earlier.

Gross margin expanded to 59.9 percent compared to 58.4 percent in 2020.

The company said sales continued to rebound strongly in the period from May 1 to June 6, up 102 percent compared to the same period in 2020 and by 5 percent versus the same period in 2019.

In this period, 10 percent of trading hours were unavailable, with just 2 percent of stores closed.