Zara Owner Inditex Records Impressive Sales and Profit Growth
In the first quarter of 2024, Inditex, the parent company of Zara, reported a notable sales growth of 7.1 percent, reaching 8.2 billion euros, while sales in constant currency grew by an impressive 10.6 percent. The company’s gross profit for the quarter increased by 7.3 percent to 4.9 billion euros, with a gross margin reaching 60.6 percent, up by 13 basis points. EBITDA saw an 8 percent increase, amounting to 2.4 billion euros, and EBIT rose by 10.3 percent to 1.6 billion euros.
The company’s profit before tax (PBT) climbed by 11.1 percent to 1.7 billion euros, while net income increased by 10.8 percent to 1.3 billion euros.
Inditex Expects Retail Expansion to Boost Sales
Inditex is optimistic about its retail expansion strategy, expecting it to significantly boost sales. The company announced that its spring/summer collections have been well-received by customers. Store and online sales in constant currency between May 1 and June 3, 2024, increased by 12 percent compared to the same period in 2023.
During the first quarter, Inditex opened stores in 28 markets. Notably, on February 29, Inditex launched its first stores in Uzbekistan at Tashkent City Mall. Additionally, on April 3, the company reopened 19 stores across seven brands and resumed online operations in Ukraine. By the end of the period, Inditex operated 5,698 stores globally.
Looking ahead to the period 2024-2026, Inditex anticipates that the contribution of physical space to sales will be positive, in conjunction with a strong evolution of online sales. At current exchange rates, the company projects a negative 2 percent currency impact on sales for FY2024, with a stable gross margin.
Inditex Board to Propose Dividend of 1.54 Euros Per Share
At the upcoming Annual General Meeting (AGM), Inditex’s board of directors will propose a dividend for FY2023 of 1.54 euros per share, divided into two equal payments of 0.77 euros per share.
Additionally, the board will propose the renewal of Baroness Denise Kingsmill and the appointment of Belén Romana GarcÃa as independent board members, and Flora Pérez Marcote as a proprietary director. Pérez Marcote has been acting as the legal representative of Pontegadea Inversiones, whose tenure will not be renewed due to an amendment in the Spanish Companies Act.
The company also announced that Anne Lange will leave the board once her tenure expires on July 14, 2024.
Inditex’s impressive growth and strategic expansions indicate a promising future, with both physical and online sales expected to drive continued success.