Zara owner Inditex sees sales slow in Q1
Despite the slower growth, the group said its Spring/Summer collections were ‘very well received’ by customers
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Zara owner Inditex has reported slower than expected sales growth in Q1, with sales up by 4.2% to €8.3bn (£7.06bn), down from the 7.1% rise seen last year, and falling short of analyst expectations of 5.3% growth.
Over the period, profit before tax was flat at €1.7bn (£1.45bn), though gross profit increased 1.5% to €5.0bn (£4.25bn). EBITDA meanwhile rose by 1.0% to €2.4bn (£2.04bn).
Despite the slower growth, the group said its Spring/Summer collections were “very well received” by customers, as store and online sales between 1 May and 9 June rose by 6% against the prior year. Nonetheless, this was down from last year’s growth of 12% between 1 May and 3 June.
While operating expenses rose by 2.3% over the period, Inditex said that all costs have been “tightly controlled” and show a “favourable evolution”.
Openings were carried out in 26 markets during the quarter, and at the end of the period, Inditex operated a total of 5,562 stores.
In the current year, the group said it is planning investments that will “scale our capabilities, obtain efficiencies and increase our competitive differentiation to the next level”.
In its latest results, the group said: “It has been 50 years since Zara opened its first store and Inditex continues to see strong growth opportunities. To take our business model to the next level and extend our differentiation further we are developing several initiatives in all key areas for the coming years.”
It added that it “remains focused on four key areas: A unique fashion proposition, enhancing the customer experience, sustainability, and the talent and commitment of our people”.
