Zara owner Inditex brought in record revenue at the start of the year

 
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Zara is opening new tech-focused flagships (Source: Getty)

Zara owner Inditex reported record sales in the first three months of the year and improved margins despite the strength of the euro.

The figures

Overall sales in the first quarter rose seven per cent in local currencies.

Revenue hit a record-breaking €5.7bn (€5bn).

This rate has accelerated so far since the period end, with sales up nine per cent between 1 May and 11 June.

Gross margin improved to 58.9 per cent, compared to 58.2 per cent, even though the strong euro affected Inditex's profitability due to a high level of non-euro sales.

Why it's interesting

Despite the new high set in the quarter, Inditex's revenues missed some analyst expectations.

Analysts at Barclays put this down to weaker organic sales growth due to the poor weather which has affected so many businesses in the first three months of the year, and pointed to the uplift in the current period as a positive sign.

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Well-known for its ability to react quickly to trends, Inditex strengthened its design capabilities with an expansion of its Spanish HQ this year, while a nearby distribution centre is due to be operational this summer.

The company also noted the opening of several new flagship stores, both for Zara and for its other brands which include Pull&Bear and Massimo Dutti.

New tech-focused Zara stores offering automated order collection points, self-checkout and mobile payment systems are now being opened in key locations. Milan, which the company called "one of its most important flagship stores in the world" was refurbished during the first quarter, while the branch in Westfield, Stratford reopened in May with the new features.

What Inditex said

Chief executive Pablo Isla said that "the strength of the integrated store and online model, bolstered by continued innovation, is driving solid growth and notable job creation".

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