Inditex: new records for revenues, profits and cash în H1 2019

Inditex posted record levels of net sales, profits and cash for a first half. Net sales topped €12.82 billion for the first time, year-on-year growth of 7%. Net profit hit a new milestone of €1.55 billion, up 10% year-on-year and net cash increased by 13% to €6.73 billion, the highest level ever.

Inditex net sales increased by 7% in the first half of 2019 (1 February – 31 July), topping €12.82 billion for the first time. In local currencies, sales growth was 7%.

The solid business performance drove first-half net profit to €1.55 billion, reflecting year-on-year growth of 10% (1H18: €1.41 billion). This figure includes the impact of the new lease accounting standard, IFRS 16, without which profit growth would have been 7%.

The group maintained its strong cash generation: the net cash position increased by 13% to a record €6.73 billion.

Inditex’s Executive Chairman, Pablo Isla, underscored the „strong first half performance reflected in these figures, with like-for-like growth across all brands and geographies. The investments we have made in the stores as well as in logistics and technology have been key elements in the development of our customer focused integrated online and offline store platform”.

Stores and online sales in local currencies increased 8% between 1st August and 8th September. Management estimates a sales growth of 4%-6% in FY2019.

Highlights for the first half of the year

During the first half of 2019, introduced its online platform in Brazil, the United Arab Emirates, Lebanon, Egypt, Morocco, Indonesia, Serbia and Israel. In August, Zara inaugurated its online platform in Qatar, Kuwait, Jordan, Bahrain and Oman.

It is also due to launch the platform in South Africa (18 September), the Ukraine, Colombia and the Philippines during the third quarter.

In all, at the July close, the group had 7.420 stores in 96 markets and the integrated online platform was available in 62 of those. The online stores of Zara, Zara Home, Massimo Dutti, Pull&Bear, Stradivarius, Oysho and Uterqüe are also available in an additional 106 markets without physical stores, with Bershka scheduled to follow suit this September.

This digitally-driven investment plan is being complemented by the constant upgrading and modernisation of the group’s logistics facilities. The construction work on the new digital production building to provide photography for in Arteixo (La Coruña, Spain) continues to make good progress and work has also begun on expanding the group’s technological and data processing capacity in A Laracha (La Coruña, Spain).

Meanwhile, the construction and commissioning work at the logistics connection hub in Lelystad (Netherlands) remains on track. The new platform has successfully completed the tests performed in recent months and will be partially commissioned during the second half, ahead of schedule; it will be fully operational in 2020.

New Zara stores in iconic flagship locations

Zara opened stores in Hudson Yards (New York, US), Cannes (France), the Time World Mall (Dajeon, Korea), Rome (Italy), Warsaw (Poland) – as Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho and Zara Home.

More recently, Zara has inaugurated a new store in Pamplona (Spain) in an emblematic building which the brand has brought back to life for the city.

Tomorrow (12 September), Zara will open its expanded store in Dubai Mall, the largest single-storey Zara store in the world, with a floor space of over 5,000 square metres that will house the full women’s, men’s and kids collections.

Also tomorrow, the expanded Zara store on calle Preciados, one of the busiest shopping streets in Madrid, will reopen. The store has a floor space of over 4,000 square metres over six floors, in which Zara will unveil its latest image and newest customer experience-enhancing technology.

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