Fashion giant Inditex’s executive chair Pablo Isla said the business has “emerged stronger” from the coronavirus pandemic despite suffering a slump in full-year profits..

Inditex posted a net profit of €1.1bn (£940m) in the year to January 31, down from €3.6bn the previous year.

The fashion titan, which posted its first ever quarterly loss during the financial year, attributed its return to profitability to the resilience of its ecommerce business, having delivered a €1.3bn net profit during the second half of the financial year.

Inditex’s net sales declined 28% year on year to €20.4bn as its entire store estate was forced to shutter for periods of the year due to coronavirus.

The fashion group, which operates chains including Zara, Zara Home and Pull & Bear, reported online sales growth of 77% in local currencies to €6.6bn. 

Inditex launched its online offer in 25 new markets during the year and used a rapid deployment of its stock management system to fulfil 46 million online orders worth €1.2bn from its stores during the year.

The retail group reduced operating costs by 17% during the year, which the business attributed to its “flexibility and ability to adapt”, and increased gross margin on a local currency basis by 170 basis points to 57.6% of sales.

Inditex’s executive chairman Pablo Isla said: “Inditex has emerged stronger after such a challenging year thanks to the amazing commitment displayed by everyone here at the company. 

“The digital transformation initiated in 2012, which is built around the integrated store and online sales platform, has proven to be the right strategy. 

“Inditex as a company is stronger today than it was two years ago, with a unique business model and a global, flexible, digitally integrated and sustainable sales platform, which places us in an excellent position for the future.”

Against this backdrop Inditex will submit a motion for the payment of a €0.70 per share dividend at its next Annual General Meeting.

Topics