Zara's parent company reported an 11.5% increase in sales at the start of summer — Reuters
The Spanish company Inditex, owner of the Zara brand, reported a strong start to the summer season. The retailer’s sales, adjusted for currency exchange rates, rose by 11.5% between June 1 and June 9, exceeding analysts’ expectations.
For the first quarter of the fiscal year, which ran from February to April, the company’s revenue reached €8.75 billion, an 8.8% increase compared to the same period last year.
Following the report’s release, Inditex shares rose by approximately 5% in trading.
Analysts note that Zara continues to increase its market share and outperform competitors. One contributing factor was the favorable location of stores in Southern European countries, where weather conditions boosted demand for summer clothing.
At the same time, the company reported the negative impact of hostilities in the Middle East on the operations of its franchise partners in the region.
Inditex CFO Andrés Sánchez stated that the company was able to quickly adapt its logistics chains to disruptions in sea and air transport. According to him, the impact of rising fuel and transportation costs in the first quarter was limited.
The company’s gross margin for the reporting period rose to 61.2% from 60.6% a year earlier. At the same time, operating expenses increased by 6.2%.
The U.S. remains Zara’s second-largest market after Spain. The company emphasizes that sales growth is driven primarily by increased sales volume rather than price hikes.
Inditex also confirmed plans to invest €2.3 billion over the course of the year in the development of its store network and other projects.
Source: Reuters
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