Stock Groups

Profit Soars at Zara Owner Inditex on Post-Pandemic Spending Spree -Breaking

[ad_1]

© Reuters.

Geoffrey Smith 

Investing.com — The largest fast-fashion company in the world had its strongest quarter for ten years in April and May, thanks to the ease of pandemic restrictions in major markets. This triggered an increase in spending on clothes.

Attained net profit Inditex (BME:), the owner of Zara and Massimo Dutti, rose to €760 million ($812 million) for the three months through April, in line with forecasts and comfortably above the €734 million that it posted in the comparable quarter in 2019, before COVID-19 swept across the globe. 

rose 36% to €6.7 billion, as the company succeeded in passing on higher input costs to customers. The operating costs rose by 24%, which is well below the growth rate in sales. 

Inditex’s underlying performance was even stronger, given that the results included a €216 million charge for closing its stores across Russia in the wake of the Kremlin’s invasion of Ukraine in February. Russia was Inditex’s second largest market by shops, accounting for 5% growth in sales between February and March.

The company stated that “the performance has been very robust across all geographies with the exception of those markets subject to restriction”, referring to China where sales were affected by lockdowns in Shanghai. By contrast,. The report noted strong growth in America at a time many U.S. apparel stores have issued profit warnings, and reduced their sales estimates due to high inflation. 

[ad_2]