WEB DESK
Zara owner Inditex reported Wednesday a jump in profits in the third quarter of its fiscal year despite soaring inflation and the war in Ukraine impacting business costs.
The group, which also owns Massimo Dutti, said it pulled in a net profit of 1.3 billion euros ($1.4 billion), between August 1 and October 31, compared to 1.23 billion euros in the same period last year.
Analysts surveyed by financial information service Factset had expected a net profit of 1.3 billion euros. Between February 1 and October 31, the ready-to-wear giant said net income rose by 3.1 billion euros, up 24% from the same period in 2021. Sales were also up 19% to reach 23 billion euros, thanks to a strong showing in stores and online. The results come despite “the current challenging context”, Inditex CEO Oscar Garcia Maceiras said, referring to red-hot inflation and the conflict in Ukraine.
The company has seen manufacturing and transport costs rise, along with other businesses impacted by supply chain bottlenecks after Covid lockdowns and Russia’s invasion of Ukraine. It said operating costs rose by 17% between August 1 and October 31 compared to the same period in 2021. Inditex decided in March to shut 502 stores in Russia and stop online sales in the country, which had been one of its biggest markets after Spain, accounting for 10% of company sales.
The retailer in October said the Russian stores would be bought by United Arab Emirates-based Daher group, Inditex’s franchisee in the Middle East. Inditex said global online and in-store sales rose by 12% at current exchange rates between November 1 and December 8, compared to the same period in 2021.
