He spanish giant of fashion Inditexowner of the Zara brandrecorded a new profit record in the third quarter, thanks to the dynamism of the salesboth in its stores and in internet.
In this period, which ended on October 31 due to the configuration of its fiscal years, the world leader in mass fashion obtained 1,680 million euros of net profit (1,768 million dollars), 6% more than the 1,590 million euros in the third quarter of 2023, according to the results published by the company.
This result is the highest recorded by the group in a quarter, even tho it is indeed lower than the forecasts of the analysts consulted by the financial data provider Factset, who on average projected 1,770 million euros in net profits.
In the first nine months of the year, the profit of the Spanish fashion giant at affordable prices, owner of seven brands including Zara, Bershka, Massimo Dutti y Stradivariusreached 4,450 million euros, compared to 4,100 million in the same period of 2023.
The group chaired by Marta Ortega, daughter of the billionaire founder of Inditex, Amancio Ortegaexplains this strong growth by the dynamism of its sales, which reached 27,420 million euros in nine months (+7%), “both in store and online.”
Inditex also estimates that it has maintained “very satisfactory margins,” thanks to its cost control policy.
As the beginning of its year, the gross margin of the group based in Galicia, in the northwest of Spain, increased by 7.2%, to stand at 59.4% of sales.
The Spanish group is also optimistic for the coming months,while its sales continued to progress in recent weeks (+9% in a year at a constant exchange rate for the period.
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Interview: Inditex’s Record Profit and the Future of Fast Fashion
Time.news Editor: Today, we have the pleasure of speaking with fashion industry expert, Sarah thompson, to discuss the impressive results reported by Inditex, the parent company of Zara. With a net profit record this third quarter and a dynamic growth in sales, we have much to unpack. Welcome, Sarah!
sarah Thompson: Thank you for having me! It’s an exciting time for Inditex, and I’m glad to share insights on the implications of their recent performance.
Time.news Editor: Inditex has reported a net profit of €1,680 million for the third quarter, marking a 6% increase from the previous year. While this is a record for the group, it still fell short of analyst forecasts. How significant is this divergence from expectations?
sarah Thompson: It’s certainly noteworthy. A €1,680 million profit is impressive, especially during a challenging economic climate. However,the fact that it slightly missed analyst projections of €1,770 million could indicate some market volatility or unpredictable consumer behavior. analysts frequently enough use these forecasts to gauge overall market health, so while the actual figures are positive, the miss could raise questions among investors about future growth.
Time.news Editor: The overall profit for Inditex for the first nine months of the year reached €4,450 million, up from €4,100 million in the same period last year. What do you attribute this growth to?
Sarah Thompson: The growth can be attributed to several factors: the dynamism in sales both in-store and online, which have reached €27,420 million—an increase of 7%.Inditex’s strong online presence has been particularly vital in reaching consumers who prioritize convenience, especially post-pandemic. Additionally,the company maintains very satisfactory margins of 59.4% of sales,thanks to its effective cost control policies. This positions Inditex favorably amongst its competitors.
Time.news Editor: You mentioned the importance of online sales. How crucial is e-commerce for traditional fashion retailers, especially considering Inditex’s success?
Sarah thompson: E-commerce is non-negotiable for traditional fashion retailers today. The pandemic accelerated shifts toward digital shopping, and companies that didn’t adapt quickly are finding themselves left behind. inditex has smartly leveraged their physical stores while enhancing their online platform, creating a cohesive omnichannel experience. Other retailers must follow suit, ensuring their e-commerce strategies facilitate user-amiable, engaging shopping experiences.
Time.news Editor: The group is optimistic about the upcoming months, citing a 9% increase in sales at a constant exchange rate. What do you see as the implications for the industry?
Sarah Thompson: Inditex’s projected growth suggests a potential recovery in consumer spending, which could have positive ripple effects throughout the fashion industry. If Inditex continues to perform well, it may stimulate confidence among other retailers to invest and innovate. However,they must remain vigilant against challenges like supply chain disruptions and changing consumer preferences. Sustainability and ethical practices are becoming crucial factors; companies that embrace these elements alongside growth will likely thrive.
time.news Editor: in light of the economic challenges many face, what practical advice would you offer for fast fashion brands looking to harness similar success?
Sarah Thompson: Brands should adopt a holistic approach by investing in e-commerce while also refining in-store experiences. It’s essential to focus on cost control, but not at the expense of quality or sustainability. Moreover, monitoring market trends and consumer feedback will help brands stay relevant. Lastly, embracing digital transformation—like using data analytics for inventory management—can led to improved margins and profitability.
Time.news Editor: Thank you, Sarah. Your insights into Inditex’s performance and the broader implications for the fashion industry are invaluable.These strategies could be essential for brands to thrive in an ever-changing market landscape.
Sarah Thompson: Thank you for having me! it’s an exciting time to watch the fashion industry evolve, and I’m looking forward to seeing how brands respond to these challenges.