Inditex, The World'S Largest Clothing Retailer, Saw Its Net Profit Increase By 64% In The First Fiscal Quarter

Inditex SA, the world's largest clothing retailer, announced on Wednesday that its net profit in the first fiscal quarter rose by 64% due to its cheap spring and summer clothing being sought after by the market and the continued global expansion.

ZARA clothing retail chain under INDITEX Group is currently in a period of rapid development and has a good development in China.

The operating income of INDITEX Group has exceeded that of U.S. Gap Inc. The company said that its net profit for the first three months ended April 30 increased to 301 million euros from 184 million euros in the same period last year. Sales increased by 14% from 2.34 billion euros to 2.67 billion euros, while operating costs increased by 11% to 1.04 billion euros.

The net profit figure was significantly higher than the analyst's forecast of 251.5 million euros, making Inditex's share price rise 4.2% to 45.74 euros per share.

Richard, retail analyst of Bank of America Merrill Lynch? Richard Chamberlain said, "The results show that Inditex's revenue still maintains a strong growth despite the macroeconomic downturn, because it has seized the share of the fragmented clothing market."

Analysts said that Inditex responded to the recovery of consumer demand at the beginning of this year in a timely manner by virtue of its quick response model. The origin of more than half of the company's products is close to the headquarters in Spain, which reduces the production time and can quickly adapt to changing fashion trends. This flexibility allows strict inventory control, reduces product costs, and thus improves profitability.

The gross profit margin (an indicator closely related to profitability) in the first quarter rose to 60% from 57% in the same period last year. Sales in the first quarter were 57% from the same period last year. The company said that the increase in profits was due to "inventory management, nearby procurement, as well as the favorable impact of sales growth and exchange rate."

Spanish retailers also said that sales had stabilized since the end of the first quarter. In local currency terms, store sales from February 1 to June 7 increased by 13%. For summer sales, Inditex Group's flagship store, ZARA, will mix and match psychedelic flowers and geometric patterns with Boho style variations in the 1970s, as well as navy style jeans, denim, and more bold soft colors and flesh colored suits and sweaters.

As of the end of this quarter, Inditex has more than 4700 stores in 76 countries, including 98 newly opened stores. A few weeks ago, it opened its first Zara store in India, bringing the total number of countries with stores to 77. Inditex plans to open stores in New Delhi and Mumbai before expanding to other major cities in India.