Inditex ITX 4.91 percent SA, Zara’s owner, reported an 80 percent boost in quarterly profits on Wednesday after the coronavirus pandemic receded.
Inditex’s sales will surpass pre-Covid-19 levels in 2020 and 2021 despite supply-chain difficulties and growing inflation in the retail sector.
A profit of €760 million ($814.8 million) was declared for the three months ending April 30 by Massimo Dutti and Bershka owner Bershka. Revenues grew by 36% to €6.7 billion in comparison to the same period the previous year.
Inditex attributed its strong sales to improved retail traffic in all of its global markets, except China and Russia, and Ukraine, save for the United States.
An 8 percent drop in the firm’s first-quarter online revenues is forecast even though online sales are predicted to increase to 30 percent of total sales by 2024.
Even though China’s major cities have been forced to shut down due to Covid-19 lockdowns in recent months, just four Inditex stores remained locked once the country reopened.
Inditex’s quarterly profits would have been significantly higher if the business had decided to close its stores in Russia and Ukraine after Moscow’s invasion of Ukraine in February. Russia, a key market for Inditex, has been closed.
According to Inditex, the political unrest in Russia and Ukraine has prompted the firm to close over 10% of its global locations.
It didn’t matter since sales in May and early June were up 17% from the same period in 2013, suggesting the next quarter would be just as strong.
Despite supply chain blockages and raw material shortages, Inditex says its inventory levels rose this year compared to last year. Because Inditex’s supply network is based in Europe and the Middle East, it has been insulated from the Asian troubles that have plagued other retailers.
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