Inditex: Record Sales With 11% Fewer Shops

InditexLogotypes of Inditex brands

Inditex’s (ITX) net profit for the first nine months of its fiscal year (1 February 2021 to 31 October 2021) rose 273% to 2.5 billion euros. In the watertight third quarter, the textile company said sales, profit before tax and net profit reached an all-time high.

During the third quarter of 2021, sales growth at constant exchange rates progressively accelerated to 21% compared to the third quarter of 2020 and 10% compared to the third quarter of 2019″, the retailer said. In the first nine months, sales reached 19.325 billion euros, 37% higher than a year earlier. Sales at constant exchange rates grew by 39%.

Shop and online sales at constant exchange rates between 1 November and 10 December 2021 grew 33% compared to the same period in 2020 and 10% compared to the same period in 2019.

At current exchange rates, the group estimates a currency impact on sales in the second half of 2021 of around +0.5% over the second half of 2020 and -5.5% versus the second half of 2019.

“During the first nine months of 2021 shop sales have continued to improve. Shop sales in Q3 2021 exceeded Q3 2019 figures at constant exchange rates, with 11% fewer shops. Online sales continue to grow strongly. Online sales at constant exchange rates grew by 28% compared to the first nine months of 2020 and by 124% compared to the first nine months of 2019. Inditex expects online sales to exceed 25% of total sales by 2021,” the company said.

Gross margin stood at 11.409 billion euros, up 40% compared to the same period of 2020, and represents 59% of sales (+101 b.p.). Based on available information, gross margin is estimated at around 57.5% (+/-50 b.p.) for 2021, Inditex added.

All expense lines have shown a “favourable evolution”, it said. Operating expenses rose 24% compared to the first nine months of 2020.
EBITDA grew by 63% to 5.431 billion euros and EBIT by 248% to 3.293 billion. Profit before tax rose 277% to 3.231 billion euros.

The textile company has specified that “strong” cash generation continues. Its net financial position grew by 16% to 9.569 billion euros.


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