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Inditex, the Spanish fashion group that owns Zara, reported first-quarter net sales of €8.75 billion on Wednesday, up 8.8% in constant currency, while early summer trading came in well above expectations and sent Inditex stock up as much as 5%.
The 11.5% constant-currency gain in store and online sales for the May 1-to-June 1 window outpaced the same stretch from a year ago, the company reported. Expectations among analysts had centered on roughly 8% growth for that stretch, Reuters reported.
Net income for the first quarter came to €1.4 billion, a 5.4% improvement over the prior year. The gross margin ticked up to 61.2% from 60.6% twelve months earlier, and gross profit expanded 6.9% to €5.4 billion. Underlying earnings, as measured by EBITDA, grew 7.3% to reach €2.6 billion.
Inditex CFO Andres Sanchez Iglesias said the company had moved quickly to adapt its supply chain amid disruptions to air and sea freight caused by the war in the Middle East. "We have been able to rapidly adapt our supply chain to ensure uninterrupted product flow to our stores globally," he said, according to The Wall Street Journal. A delay between when goods are shipped and when those costs register on the income statement has cushioned the first-quarter figures from the full brunt of elevated freight and fuel expenses, he noted, Reuters reported.
