Inditex sales bounce back after flat 2013 profit

Wednesday 19 March 2014 08.19
Inditex has suffered from a double-dip recession in its home market Spain
Inditex has suffered from a double-dip recession in its home market Spain

Global clothing giant Inditex, owner of Zara, said early 2014 sales shot up after unusually low profit growth last year due to depreciating currencies outside the euro zone and the cost of refurbishing flagship stores.

Core annual profit in the 12 months ending January 31 was flat compared with a year earlier for the first time since Inditex went public, company results showed today.

Inditex, owned by the world's third wealthiest man, Amancio Ortega, made sales across its 86 markets of €16.7 billion in 2013.

This was exactly in line with the forecast in a Reuters poll and up 5% from a year earlier.

The Spanish retailer, which runs brands such as mid-market Massimo Dutti and teen labels Bershka and Stradivarius, said sales rose 12% in the period from February 1 to March 15, which an analyst said indicated improvement in key markets.

Inditex has suffered from a double-dip recession in its home market Spain, where domestic spending has plummeted, and has quietly been expanding its budget Lefties brand.

Spanish sales have fallen an average 2.7% on a like-for-like basis for the last five years, compared to a 5.5% rise in global sales.

The company said it was proposing a €2.42 per share dividend on 2013 earnings, up 10%.

Its net profit for the year ending January 31 was €2.4 billion, up 1% from a year earlier. Earnings before interest, taxes, depreciation and amortisation (EBITDA) was unchanged at €3.9 billion.