Inditex sales and profits rise, continues to link the physical with the digital
Inditex continued its stellar run in the first half with the company on Wednesday reporting more sales increases and another rise in net profit. And it added-in the welcome information that the early drops of its autumn collections have been “well-received” so it expects like-for-like sales in H2 to be either the same as or better than those of H1.
In the six months up to July 31, its net sales rose 3% and reached a record €12.03 billion, with all geographical markets seeing growth. They would have been higher if not for the strength of the euro, and in local currencies they were up 8%, with like-for-like sales rising 4%. Meanwhile net profit also rose 3% to reach a healthy €1.4 billion.
While its shares have fallen this year due to analysts seeing it as a more mature business with less opportunity for explosive growth, it’s certainly not finished with growth just yet.
And in its prediction for the second half, the company said that the current strong performance means like-for-like sales should rise as much as 4% but could also reach 6% in the six-month period. Its H1 gross margin rose 4% and should expand by around 50 basis points during the second half.
The company, which has 7,422 shops in 96 countries, continues to expand on this front, but it also has webstores in 49 of those countries and has already announced that it plans to sell all of its brands online worldwide by 2020 as part of its commitment to growing its digital operations.
Yet the size of that store estate shows that it remains committed to physical locations and in H1 its brands opened flagships in all regions, with a focus on integrating new technology into those shops, as well as eco-efficient measures.
Linking the physical with the digital is a priority for the group. Two examples of this in H1 saw it using augmented reality technology in more than 130 Zara stores globally, and its See Now Buy Now catwalk show for Massimo Dutti in Shanghai having been broadcast live on social media.
It's also focusing on innovation in other areas apart from technology, with creative partnerships such as the new collection designed by artist Miley Cyrus for Converse in May that debuted in Bershka, and initiatives such as Oysho’s first pop-up gym, the Oysho Sport Hub, running in Moscow, Madrid, Istanbul and Milan.
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