Inditex earns 80% more in Ortega’s first quarter at the helm and provides 216 million for Ukraine | companies | The USA Print

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Inditex has communicated the results of its first fiscal quarter of the year, in the premiere of Marta Ortega as president of the company. The group that owns Zara or Massimo Dutti registered between February and April a net profit of 760 million euros, which represents a growth of 80% compared to the same period last year. The figures include a provision of €216 million for estimated expenses in Ukraine and Russia for the full year 2022. Without the provision, the result would reach €940 million.

The figure has been slightly below the estimate by Bloomberg analysts, who expected a net profit of 796 million euros in the three months, without taking into account the provision.

After the return to normality, the stores are once again the company’s sales engine to the detriment of internet sales. Inditex’s total sales in the first quarter grew by 36%, to 6,742 million euros, supported by the recovery of traffic in stores and by the good reception by customers of the collections of the group’s seven brands, explains the company. Experts anticipated lower sales of 6,240 million.

However, the growth in store sales has penalized online sales, which, at a constant rate, fell by 6% due to the “strong comparable base” since growth of 67% was recorded in the first quarter of last year. Inditex expects online sales to exceed 30% of total sales in 2024.

For its part, the operating result (Ebitda) grew by 55% to 1,917 million euros, while Ebit grew by 82% to 1,034 million euros, a figure similar to that expected by analysts, of 1,050 million euros.

At the start of the second quarter, revenue grows in double digits. Store and online sales at constant exchange rates between May 1 and June 5, 2022 have grown by 17% over the record period of 2021 and Inditex points out that the spring/summer collections “have been very well received” .

Inditex highlights the “strong growth in store traffic”. Throughout the first quarter, store sales have grown “outstanding” and continue this trend. The differentiation of Inditex stores has been key in this process.

According to the company, “all geographic areas, with the sole exception of markets subject to restrictions” have recorded “strong performance”. The “strong growth” in the United States also stands out.

The gross margin grew by 37% to 4,054 million euros. Gross margin reached 60.1% (increase of 20 basis points over the first quarter of 2021), the highest in 10 years.

During the period, openings were made in 16 markets, reaching 6,423 stores.

Regarding forecasts, Inditex continues to see “great growth opportunities”. At current exchange rates, Inditex expects a “currency-neutral impact” on sales in 2022.

Dividend

As approved in March 2022, the Inditex board of directors will propose to the General Shareholders’ Meeting a dividend of 0.93 euros per share charged to the results of the 2021 financial year. This dividend is made up of two equal payments of 0.465 euros per share: the first has already been made on May 2, 2022 and the second will be held on November 2, 2022. In March, the Board of Directors also proposed an extraordinary dividend of 0.40 euros per share to be paid in relation to the year 2022.

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