Inditex (ITX.MC), which owns Zara, saw sales of its spring-summer 2023 collection rise over the last six weeks, but its shares dipped on Wednesday due to greater investment spending.
In 2022, Marta Ortega, daughter of founder Amancio Ortega, became Inditex’s chair, and sales surpassed pre-pandemic levels. Profits rose 27%.
Before the epidemic, the world’s largest apparel retailer’s in-store and online sales grew 18% to 32.6 billion euros ($34.99 billion) in 2021 and 15% from 2019.
Inditex’s first six weeks of the fiscal year they ended with strong sales on January 31, 2024.
Inditex reported 13.5% revenue growth from February 1 to March 13. Sales rose 17.5% in constant currency, excluding Russia, where Inditex outlets have been closed since the Ukrainian war began a year ago.
Inditex startled investors by increasing capital spending to 1.6 billion euros from 1.1 billion euros the year before.
“It is the proper thing to maintain on investing for this future development,” CEO Oscar Maceiras told investors on a teleconference.
Due to updated security technologies, Inditex will phase out hard tags in shops this year. As a result, even though there were 10% fewer locations in 2022, the retailer increased store productivity by 23%.
Zara’s earnings before tax rose 38.5% to lead Inditex. On the other hand, Oysho and Massimo Dutti lost 12% and 10% pre-tax profit, respectively.
Deutsche Bank, UBS, and Royal Bank of Canada analysts said that Inditex clothing sales persisted following a 5% price increase early last year to offset growing expenses.
H&M (HMb.ST) customers are increasingly price-sensitive. As a result, on Wednesday, H&M’s December-February net sales rose 12%, below market forecasts.
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