Zara owner Inditex profits and sales hit ‘historic highs’ bolstered by online surge

Inditex recorded a net profit of €1.27bn (£1.1bn) in the six months to July 31 compared with a loss of €195m (£166.5m) during the same period the previous year, while sales surged 49% to €11.9bn (£10.2bn).

The fashion giant’s online sales during the period rose 36% year on year and were up 137% against the same period pre-pandemic. For the full financial year Inditex expects online sales to account for a quarter of overall revenue.

Inditex’s second-quarter revenues rose 7% year on year to €6.9bn (£5.9bn) while net profit hit €850m (£726m) – both of which mark the highest quarterly financial results on record for the group.

Inditex’s strong sales growth was delivered despite a 15% decline in store trading hours during the financial period due to pandemic-related restrictions.

The fashion group’s gross margin stood at 58% during its first half, which it attributed to the “performance of the business model, its flexibility and digital transformation”.

Zara opened or expanded a number of high-profile city stores during the financial period in locations including Barcelona, Guangzhou and Cairo, with further openings in London, Paris and Milan planned later in the year.

Inditex’s second half is off to a strong start, with sales across stores and online up 22% in the period between August 1 and September 9 year on year and up 9% on 2019 levels.

Subsidiary Zara is also set to launch menswear athletic line Athleticz at the end of this month.

Inditex executive chairman Pablo Isla said Inditex’s performance was “the result of the commitment displayed by everyone at the company and their continued focus on delivering top creative and quality fashion. Thanks to all of them we are reaping the benefits of the strategic and sustainable transformation in our unique business model.”