Inditex’s revenue and profit climb in 2021 despite pandemic challenges – WWD
LONDON – Net profit at Zara’s parent company, Inditex, nearly tripled to 3.24 billion euros in fiscal 2021, as revenue rose 35.8% to 27.7 billion. euros. Online accounted for a bigger share of revenue than ever in the 12 months to January 31, the Spanish giant said on Wednesday.
Inditex Executive Chairman Pablo Isla noted that “after two years of the pandemic, this set of results demonstrates” the company’s ability to adapt to difficult circumstances.
Group CEO Óscar García Maceiras pointed to Inditex’s digital transformation in recent years and said the company was in an “unrivaled position to deliver an exceptional level of commitment with our sustainable and quality fashion”.
The company said performance through 2021 was shaped by the COVID-19 pandemic, with first-quarter store hours 24% below capacity due to health restrictions.
Inditex said after the pandemic subsided last spring, sales rebounded strongly and the group posted record levels of profit in the second and third quarters.
In 2021, the revenues of Online sales amounted to 7.5 billion euros, up 14% year-on-year. Inditex had seen the chain grow by 77% in 2020.
Inditex said online sales now account for 25.5% of the group’s total sales, and that figure is expected to reach 30% of total sales in 2024, making the Spanish fashion giant one of the biggest global players in the world. e-commerce.
Gross margin was 57.1%, the highest level in six years, while EBITDA was €7.18 billion and EBIT €4.28 billion. euros, showing year-on-year growth of 57.8% and 184.2%, respectively.
Net cash was 9.36 billion euros, a record high, Inditex said.
The board of directors announced that it would ask the company’s shareholders to approve a dividend of 0.93 euros per share, up 33% compared to 2020. In addition, the board agreed to pay a dividend extraordinary of 0.40 euro per share for 2022, which will be added to the ordinary dividend to be paid during the year 2023.
From a sales perspective, fiscal 2022 started with double-digit growth, with in-store and online sales between February 1 and March 13 up 33% compared to the same period in 2021. They were 21% higher than the pre-COVID record. 2019 levels, Inditex said.
As reported, Inditex closed all of its stores in Ukraine and prioritized the safety of its workers in the region. The group also suspended its activity in Russia “due to the inability to guarantee operations”.
During the period from February 1 to March 13, in-store and online sales in the Russian Federation and Ukraine accounted for about 5 percentage points of sales growth, Inditex said.