Inditex quarterly profits rise despite temporary closures
Retailer Zara's parent company Inditex reported improved quarterly profits on Wednesday despite taking a €216.0m hit as a result of the temporary shuttering of its business in both Ukraine and Russia.
The Madrid-listed company said net income profit had risen to €760.0m in the first quarter of the year and also pointed to a decade-high gross margin of 60%. Earnings before interest and taxes nearly doubled year-on-year to €1.03bn.
Quarterly sales came to €6.74bn, ahead of analysts' expectations for a print of €6.29bn and 36% higher year-on-year.
Inditex, the largest fashion company in the world, stated its strong results had been driven by what it branded a "sharp recovery in store traffic" and a "good reception for all seven brands' new season collections".
Taking away the provision to cover costs relating to its Ukrainian and Russian operations, Inditex stated it would have reported a net profit of €940.0m. Sales growth was said to be strong across almost all geographies, with the exception obviously being those that were affected by restrictions throughout the period.
Inditex added that the current quarter had begun strongly, with sales rising 17% organically as of 5 June.
As of 0850 BST, Inditex shares were up 4.59% at €23.24 each.
Reporting by Iain Gilbert at Sharecast.com