May Sales at Inditex Climbed Above Pre-Pandemic Levels

PARIS — As the retail scene moves toward pre-pandemic trading conditions, Zara owner Inditex reported a 50 percent jump in sales over the first quarter compared to lockdown periods the year before.

“Our differentiation and strategic transformation towards a fully integrated, digital and sustainable model continues to bear fruit,” Inditex executive chairman Pablo Isla said in a statement.

The Spanish fast-fashion retailer, which also owns labels Massimo Dutti, Bershka and Stradivarius, said that sales for the three months ending April 30 came to 4.94 billion euros, an 11.5 percent decline compared to its performance in 2019, before the coronavirus crisis struck. Over the quarter, 16 percent of stores were closed.

In a sign that business continued to improve in recent weeks, the retailer also reported that sales in local currencies rose 5 percent in the May 1 to June 6 period, compared to 2019 figures, a 102 percent increase compared to last year.

Those figures show a “strong progressive recovery,” noted analysts at Berenberg in a research note. The analysts said that Q1 sales overall were in line with expectations, while earnings numbers were better than expected.

“There is an encouraging recovery,” noted Berenberg, citing progressive store openings.

Earnings before interest, tax, depreciation and amortization came to 1.24 billion euros, a 155 percent increase compared to the same period last year. Net income stood at 420 million euros. The gross margin figure, 59.9 percent, beat expectations, analysts noted.

“A solid start,” to the second quarter, commented analysts at RBC, who were a bit disappointed by the first-quarter tallies.

Inditex has been drawing on digital means to navigate choppy trading conditions, and executives have touted its integrated stock management system that has been rolled out in thousands of stores around the world as playing a key role in allowing business to continue when stores were shut due to the pandemic.

The company has been investing heavily into bulking up its digital means. Over the first quarter, the retailer inaugurated its new Zara.com building at company headquarters in northern Spain, a 110 million euro investment that includes audiovisual production studios.

Inditex has also been working to sprucing up its store network, shutting smaller outlets while focusing on more spacious, high-tech stores.

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