Inditex H1 profit dips on weak margin

Inditex reported a surprise dip in H1 profit Wednesday, hurt by margin pressure, although global revenue gains remained solid despite political and economic turmoil in some of its high-growth markets. The Spanish fashion giant noted that currency neutral sales in the most recent August 1-September 12 period jumped 10%. For H1, net income slipped 2.4% to €928m ($1.2bn) from €951m a year ago as ebitda declined 0.4% to €1.617bn from last year’s €1.624bn.

Net sales, meanwhile, rose 5.6% year-on-year to €8.09bn as same-store sales increased 4.5%. Store and online sales in local currencies grew 11%.

Analysts had forecast net profit of €908m, ebitda of €1.6bn, on sales of €8.1bn.

During the period, Europe generated 45.6% of total sales, up from 44.6% a year ago, while Spain was flat at 19.3%.

The Americas generated 13.4% of total sales, down from 14.4% a year ago. Asia remained flat at 21.7%.

Gross margin in H1 declined to 57.6% from 58.6% a year earlier.

Inditex shares opened up 1.2% Wednesday morning.

Know what’s next. Become a WGSN member today to benefit from our daily trend intelligence, retail analytics, consumer insights and bespoke consultancy services.

WGSN Insider Bulletin

Big data meets consumer insights. Experience WGSN.

Related Stories

Nike Adapt BB: Personalisation, connectivity and future footwear

WGSN X Mills Fabrica: Closing the loop

2019’s big growth area? Smart homes, waste reduction and keeping it simple