Inditex H1 profit and sales jump, but margin falls
Spanish clothing giant Inditex booked increases in both earnings and revenues in the first half of the year but gross margin was hurt by the strong appreciation of the euro versus most major currencies.
Posting its interim half-year results today (20 September), Inditex said net income in the period to 31 July totalled EUR1.37bn, a 9% increase on earnings of EUR1.26bn (US$1.64bn) a year earlier.
Net sales were up 11.5% to EUR11.7bn from EUR10.47bn in the prior year, while gross margin narrowed to 56.4% from 56.8% last year. Inditex said the performance was mainly due to the mix effect caused by the strong appreciation of the euro versus most major currencies since June.
The company added it took the commercial decision to make a quick transition from the spring/summer season into autumn/winter, programming in a "strong" launch of the campaign in August.
Like-for-like sales meanwhile, grew 6% in the six-month period, compared to 11% in the first half of last year, and were positive across all geographies. The like-for-like calculation includes 84% of total store and online sales.
Global online sales launches are on track, with Zara having launched online in Singapore, Malaysia, Thailand and Vietnam so far this year. The brand will launch online sales in India on 4 October.
In addition, store and online sales in local currencies have increased by 12% from 1 August to 17 September 2017.
Inditex will release its interim nine months 2017 results on 13 December.
In July, the company detailed expansion plans for 2017, which will see a raft of its brands enter Belarus.