€25.34bn in annual sales: Inditex powers ahead as online sales leap
As is usual, Inditex mostly let the figures do the talking. As is usual, they’re good too. The Spanish fashion mega-group saw fiscal 2017 revenues rise 9% to a staggering €25.34bn. This year has started well too, with store sales between February 11-March 11 also up 9% in local currencies, it noted.
Net profit, meanwhile, rose 7% for the year to €3.37bn, while core earnings (ebit) also lifted 7% (or +12% currency neutral) to €4.3bn. Its also informed us that its worldwide tax contribution was nearly €6bn.
Same-store sales for the year also rose 5%, with positive growth across all geographic areas and in all concepts, it said.
Up high in its report Wednesday was news online sales also leapt 41%, now representing 10% of total sales and by 12% in countries where it has an online presence. Today it debuted its Zara digital sales platforms in Australia and New Zealand, adding to those recently added in India, Vietnam, Singapore, Thailand and Malaysia. There’s also news of a new COO appointment to drive on its onmichannel offer (see below).
Its websites, meanwhile, received 2.42bn visits in 2017 and, at a peak, serviced 249,000 orders per hour. Social media profiles of the group’s eight brands total 121m followers.
At the physical end, the group ended the year with a store count of 7,475, up by a net 183 stores. This included the opening of 524 stores in 58 markets, offset by the closure of 341 smaller units which Inditex said were “replaced or absorbed by larger stores”. As part of its ongoing plan to focus on larger units in prime locations, the group enlarged 144 flagship stores and refurbished a further 122 stores.
And how much did Inditex invest last year? €1.8bn went into further developing its integrated stores and online model and upgrading technology. It noted the rollout of RFID technology improved fexibility and response times by integrating stores and online inventories.
Any not-so-good news? As you ask, gross margin fell from 57% in 2016 to 56.3%, due to the stronger euro. Oh, and that 5% comparable sales rise was also the smallest in three years. However, it did note that comp sales have risen 36% in the last five years. In a brief statement, CEO Pablo Isla described it as a year of “solid growth”, due to the “unique strength of our integrated stores and online model [having] significant growth potential.
“The prescient investments made in technology and logistics in recent years, coupled with space optimisation, mean the company is well placed for continued growth across all its markets.”
Carlos Crespo has being appointed to the new position of chief operating officer, in charge of the coordinating IT, Logistics and Transport, Works, Procurement, and Sustainability departments. Reporting directly to the CEO, he will focus primarily on the “digital transformation of the company and reinforcing the group’s integrated store and online business model”. Crespo was formerly the group Internal Audit director.