Zara mother with record profit
Fast-fashion giant impresses with quarterly figures
05.06.2024, 13:47
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In the competition between the fast-fashion giants, Inditex is focusing on identifying trends and changing collections even faster. The approach is paying off. Even analysts are surprised by the record profit.
Despite increasing online competition, the Spanish textile giant Inditex has posted record profits in the first quarter of its financial year. The world’s largest textile group, with brands such as Zara and Bershka, earned a net profit of 1.29 billion euros from February to the end of April, Inditex announced. That was eleven percent more than in the same period last year.
The Galicia-based group’s sales rose by seven percent year-on-year to 8.15 billion euros. Despite continued high inflation and geopolitical headwinds, Inditex’s share price has climbed in recent months. The company announced that it will invest 900 million euros in its logistics capacities in 2024 and 2025. There are “great growth opportunities” there, Inditex explained.
The H&M rival met market expectations with its latest figures, while the Swedes had positively surprised analysts at the end of March. However, H&M had to accept a drop in sales in its first business quarter. In the competition between the fast-fashion giants, Inditex is relying on being able to identify trends and change collections even faster.
The Spanish company, as well as competitors such as the Swedish fashion house H&M, are facing strong online competition, particularly from Shein, a Chinese-based cheap clothing company. Shein is planning an IPO in the UK. With a potential valuation of around 50 billion pounds (60 billion euros), it could be one of the largest IPOs in London in recent times.