Spain’s Inditex reports 9% growth in August sales
Spanish group Inditex, which owns the Zara brand, reported a stronger-than-expected start to the autumn trading season: its currency-adjusted sales rose by 9% in August. As Asharq Al-Awsat reports, the result was recorded despite abnormal heat in Europe, which is changing purchasing behavior in the company’s largest market.
Second-quarter results
In the second quarter, which lasted from May to July, Inditex generated €11 billion in sales. The company described the result as strong despite high energy prices and weak consumer sentiment.
Inditex’s gross profit for the first half of the year rose by 8.3% to €11.6 billion, while its gross margin was 58.7%. Chief Executive Officer Oscar García Maceiras said the results demonstrate the capabilities of the company’s teams, which operate in a challenging global environment.
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Heat and Lefties expansion
According to European Union scientists, June and July in Western Europe were the hottest on record. Due to prolonged heat, retailers in Europe and the United States are changing product delivery schedules: warm weather continues during the back-to-school preparation period, when stores usually begin selling jackets and coats.
Inditex is expanding the presence of its cheapest brand, Lefties, in the United Kingdom and plans to launch it in Germany next year. The company aims to attract more lower-income shoppers who may have moved away from Zara as it shifted toward higher price categories.
Last month, Inditex shares reached a record price of €59.1. The company is also investing in store upgrades and logistics development: RBC analysts estimate that its annual capital expenditure is about three times higher than that of Swedish competitor H&M.
