Inditex earns 1,168 million in its first fiscal quarter, 54% more, and increases its sales by 13%

It foresees an ordinary investment of around 1,600 million in 2023 after raising its net cash by 14%, up to 10,508 million.

Inditex earns 1,168 million in its first fiscal quarter, 54% more, and increases its sales by 13%

It foresees an ordinary investment of around 1,600 million in 2023 after raising its net cash by 14%, up to 10,508 million

Inditex registered a net profit of 1,168 million euros during the first quarter of its 2023-2024 fiscal year (between February 1 and April 30), which represents an increase of 54% compared to a year earlier, thanks to a "strong" operational performance, as reported by the group on Wednesday.

Without the provision of 216 million euros for Russia and Ukraine made in the first quarter of 2022, the net profit would have been 940 million euros.

Sales, for their part, grew by 13% compared to the first quarter of 2022 and reached 7,611 million euros, with a "very satisfactory" evolution both in store and online. Sales at constant exchange rates increased by 15%.

The group founded by Amancio Ortega has highlighted that sales have been positive in all geographical areas and in all formats.

Likewise, the gross margin grew by 14% to 4,603 million euros and stood at 60.5% (34 basis points compared to the first quarter of 2022). Operating expenses grew 13%, below sales growth.

The operating result (Ebitda) grew by 14%, to 2,195 million euros, while the net operating result (Ebit) grew by 43% to 1,483 million euros and the result before taxes by 52%, to 1,505 million euro.

The net financial position grew by 14%, up to 10,508 million euros at the end of the first quarter of its last fiscal year.

"In line with the solid execution of the business model, the flows generated increased significantly," he stressed.

Due to "strong" operating performance during the fiscal first quarter and normalization in supply chain conditions, inventory was up 5% as of April 30, 2023.

In the first fiscal quarter, the company has opened in 17 markets. At the end of the period, Inditex operated 5,801 stores.

Facing the second quarter, the company has stressed that the spring-summer collections continue to be "very well received" by its customers.

Thus, store and online sales at a constant exchange rate between May 1 and June 4, 2023 have grown by 16% compared to the same period in 2022.

GROWTH OPPORTUNITIES, WITH 1,600 MILLION INVESTMENT

Inditex is present in 213 markets, with a low share in each of them and in a highly fragmented sector, which is why it continues to see "great growth opportunities" and estimates an ordinary investment of around 1,600 million euros in 2023.

This year, the firm has planned investments to increase operating capacity, obtain efficiencies and increase differentiation to the next level.

Specifically, the company has explained that its priorities are: to continuously improve its fashion proposal; optimize the customer experience; increase our focus on sustainability; and preserve the talent and commitment of its workforce.

"Giving priority to these areas will boost growth in the long term," he stressed.

"To take our business model to the next level and further expand our differentiation, we are developing different initiatives for the coming years in all key areas," he added.

Likewise, the company continues to estimate a "strong" sales productivity in its stores, so that the gross growth of the space in 2023 will be around 3%.

"The optimization of the stores is an ongoing task," highlighted the company, which expects the contribution of sales space to be positive in 2023.

"We continue to experience a very positive evolution in 'online' sales and we expect a growing participation of the same in the total sales of the group", has indicated the group that, at current exchange rates, expects a currency impact of -2, 5% on sales in 2023.

In 2023, Inditex expects a stable gross margin (/-50 basis points).

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