Online sales at Zara owner Inditex see company profit despite lockdown
Online sales at Inditex grew 67 per cent in the first quarter of 2021, helping the group swing from a loss in 2020 to an underlying profit.
In the three months to 30 April sales stood at €4.9bn, up 56 per cent from last year, excluding the impact of currency changes, but 11.5 per cent lower than 2019.
The group reported net income of €421m, compared to a €409m loss in 2020 and €734m profit in 2019.
Like most retailers, Inditex was affected by coronavirus lockdowns, with nearly a quarter (24%) of trading lost due to Covid restrictions in Q1.
Though sales were up on the whole, most of that was driven by online, which were up two-thirds from last year.
The group plans to pay the remaining €0.35 dividend payment on 2 November 2021, bringing the total to €0.70.
“The results show a progressive recovery even as they have been materially affected by the health situation with the temporary closure of stores in key markets like the US, France, Germany, Italy, Portugal and Brazil,” the company said.
Laura Hoy, equity analyst at Hargreaves Lansdown added: “Given nearly a quarter of the group’s trading hours were lost to lockdowns between February and April, Zara owner Inditex’s results were pretty attractive.
“While the resilience shown by Inditex should be commended, the retailer isn’t out of the woods yet. Operating costs rose, as stores reopened and the group continued its push online and profits are still less than half of pre-pandemic levels.”