Spanish fashion giant Inditex is expected to continue its recovery from the impact of the pandemic and reach pre-pandemic sales levels. Despite facing a challenging macroeconomic environment and high levels of inflation, analysts predict that Inditex’s second-quarter results will show moderate revenue growth of up to 9.7% compared to the same period last year.
Inditex, led by Marta Ortega, has already indicated that its Spring/Summer collections have been well-received by customers. In the final two weeks of May, the company recorded a 13% increase in sales compared to the same period in 2021. This positive performance has been supported by strong working capital figures and a significant increase in high-quality inventory, which helps mitigate supply chain disruptions. Inditex’s net cash position also improved during February to April, reaching €9.189 billion, indicating a strong financial position for the company’s future expansion plans.
Analysts anticipate a positive market response to Inditex’s second-quarter results, as tourism flows and socialization activities rebound, leading to an increased demand for apparel. The easing of Covid restrictions in China is also expected to have a positive impact on Inditex’s market performance in the short term. It’s important to note that these upcoming results will be the first without the contribution of the Russian and Ukrainian markets.
In the first quarter of 2022, Inditex reported a net profit of €760 million, which was an 80% increase compared to the same period in the previous year. However, this figure includes a provision of €216 million for expected expenditures in Ukraine and Russia for the entire financial year of 2022. Without this provision, net profit would have reached €940 million. Total revenue for Inditex’s brands, which include Zara, Massimo Dutti, and Pull&Bear, saw a significant increase of 36% to €6.742 billion in the first quarter.
The second-quarter results, set to be published on September 14, will provide further insight into Inditex’s performance and its ability to navigate challenging market conditions. With its strong financial position and well-received collections, Inditex remains optimistic about its growth prospects for the future.
For more information on Inditex, visit their official website here. Additionally, you can learn more about their brands and collections by visiting their online store here.
