Inditex posts €866 million net profit in third quarter

Worldwide
Published:  16 December, 2020

The fashion retail Group said it managed to turn around the impact caused by the Covid-19 pandemic, generating a net profit of €671million in the nine months of fiscal 2020, and €866 million in the third quarter.

Inditex said that despite 5% of the stores having closed in the third quarter and ongoing trading restrictions affecting 88% of the store network, the sales trend continued to improve; sales declined 14% in the third quarter of 2020, compared with reductions of 31% in the previous second quarter and 44% in the first quarter. Sales amounted to €14.1 billion in the first nine months of its fiscal 2020 (February 1 - 31 October 31), compared with €19.8 billion the same period in fiscal year 2019. The third quarter registered sales of €6.1 billion, compared with €7 billion in the same quarter of 2019. EBITDA amounted to €3.3 billion in the first nine months of the year, and EBIT stood at €946 million. Net profit was €671 million in the period. In the third quarter alone, the Group recorded a net profit of €866 million.

According to the Group, sales in local currencies on October 1 - 18 rebounded to match the record levels recorded a year earlier, with growth in online sales remaining strong, with 75% growth in constant currencies in the first nine months of the year, and 76% in the third quarter. “These results are the direct consequence of effective management in every area of the company, with a seamless coordination between each link in the business model: design, product, manufacturing, logistics, stores and online. They are also evidence of the Group’s ability to react and adapt continuously in an unpredictable environment and its unwavering commitment to offering unbeatable product, quality and service”, said Pablo Isla, Executive Chairman, Inditex. The Group said it has been forging ahead with its differentiated retail space and product offer, with high-profile openings in 25 markets during the nine-month period, including in China, Mexico, Russia, Germany, The Netherlands, Spain and Saudi Arabia.

Inditex said that throughout the reporting period, it continued to make progress towards its sustainability targets, moving steadily towards the implementation of more sustainable processes and raw materials. Initiatives include the full deployment of the eco-efficient store programme, the placing of take-back containers in every store, the use of fibres of cellulosic origin sourced from certified and sustainably-managed forests and the elimination of all plastic bags. Moreover, the Group said it is set to exceed its target for the volume of garments on sale under the ‘Join Life’ label, distinguishing particularly sustainable processes, which will account for over 30% of the total, well above the originally-targeted 25%.