Fashion giant Inditex, which owns Zara, celebrated a “strong recovery in operations” during its third quarter ahead of more lockdowns in various countries.

Inditex reported a 76% online sales uplift in the period to October 31 and said that store sales were improving “progressively”. 

Net sales came in at €6.1bn (£5.5bn), a 10% decline in constant currency.

Inditex said such sales “reached the historic highs of the same period in 2019” between October 1 and 18. From that date a new raft of closures and restrictions to combat the Covid pandemic were introduced in various markets.

EBITDA was down 10% to €1.8bn (£1.6bn) and net income slid 13% to €866m (£789m). 

Inditex reported: “The results have been materially affected by the health crisis, with temporary store closures and restrictions to operations. To minimise the impact, we have actively managed our supply chain, inventory and operating expenses in the period. 

“The initial collections for autumn/winter were very well received by our customers. Most of the stores reopened by the end of July, but with capacity and opening hours restrictions. In the [third quarter] , 5% of stores remained closed and 88% of the Group’s stores had restrictions. In a somewhat more normalised environment, store sales have recovered strongly.”

However, in November 21% of Inditex’s shops remained closed, “with a significant impact on store sales”. Most began to reopen at the start of December, but 8% of branches are temporarily closed and another 10% are shut at weekends. 

Broker Jefferies said the third-quarter performance showed “a strong rebuild in performance in the weeks ahead of the second European lockdowns”, but that “the immediate outlook is more uncertain given a reacceleration in recent infections”. 

Jefferies maintained: “The past months have shown that Inditex is better equipped than most in minimising gross margin (and cashflow) pain from store closures. And that the group enjoys major share gains when allowed to trade across channels.”

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