Inditex presented this Tuesday the business results corresponding to its first fiscal semester, between February 1 and July 31, and met expectations. Textile has left the crisis caused by Covid-19 behind and has broken all records, both sales, such as ebitda (gross operating result) and net profit have reached a historical maximum.
Between February and July, the group chaired by Pablo Isla registered a net profit of 1,272 million euros compared to the losses of 195 million that were recorded in the same period of the previous year in full confinement. It should be remembered that these were the first – and to date only – red numbers in its history.
In the first half of its fiscal year, sales totaled 11,936 million euros, 49% more than in 2020, and at a constant exchange rate the growth was 53%. The good tone of online sales stands out with a growth of 36% compared to 2020 and 137% compared to 2019, before the pandemic. Inditex’s goal is for the online channel to exceed 25% of the total by 2021. “Online sales continue to grow at very high rates,” Isla explained during the presentation of the results.
Despite the fact that in both the first half and the second quarter it has obtained historical results, it seems difficult that it will be able to close the year at levels prior to the pandemic (see graph). In the year prior to Covid, it obtained a profit of 3,639 million euros, while the consensus of analysts expects it to close this at 3,499 million, still 3.8% below, although it will mean 213% more in 2020 when its profit is reduced to 1,106 million. In the absence of knowing how the next few months will pass, the third quarter has started on the right foot.
“Sales at a constant rate in the period August 1 and September 9 have increased by 22% compared to the same period in 2020 and by 9% compared to 2019, which was not an easy base to beat,” the experts detail of Banco Sabadell.
Elena Fernández-Trapiella, an analyst at Bankinter, is also very optimistic regarding Inditex’s next few months: ” the third quarter has started strongly . Once the restrictions have been lifted, the growth prospects are positive in an environment that is back to normal. normalcy and renewed appetite for fashion. ”
Disappearance of Uterqüe
As part of Inditex’s strategy, Uterqüe will be fully integrated into Massimo Dutti over the next year. Inditex’s luxury brand is the one with the least sales each year. In the first semester they have risen to 48 million, 54% more than in the same period of the previous year. At Massimo Dutti, however, they amount to 607 million. The latter is positioned as the third store that sells the most, 5%, only surpassed by Zara, which represents 71% of total sales, and Pull & Bear, which accounts for 6.5%.
“From an operational point of view, the integration of Uterqüe into Massimo Dutti means that the premium brand has not really succeeded as a standalone, ” Credit Suisse experts explain.