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Zara owner Inditex, the world’s biggest fashion retailer, reported a modest acceleration in sales growth in the crucial final quarter of 2023 while cost cuts helped its profits to grow.
Underlining its status as one of the sector’s better performers, the Spanish retailer said sales grew 8.6 per cent year on year to €10.4bn in the three months to the end of January, up from a 6.6 per cent pace in the previous quarter.
Inditex also said the current quarter was off to a “strong start”, with sales up 11 per cent in the first six weeks and spring and summer collections “very well received by customers”.
Net profit in the past quarter climbed by 23.5 per cent to €1.3bn, slightly ahead of analyst expectations, as its gross margin, a key measure of profitability, stayed stable.
Inditex has been gradually raising prices while shifting its emphasis to more stylish designs in its long-running battle with fast-fashion rival H&M.
At the same time the Zara owner is trying to keep a tight rein on expenses. Óscar García Maceiras, chief executive, described cost control as “rigorous” and noted that expenses had increased by less than sales over the full year.
The company, which has roughly 5,700 stores in more than 90 countries, nonetheless said its capital spending would hit about €1.8bn in 2024.
A key component will be improvements in its logistics systems with €900mn spent over the next two years on new distribution centres for Zara, the Bershka brand and footwear in Spain, as well as the expansion of a Zara hub in the Netherlands.
