Saturday, May 27

Inditex earned 3,243 million in Pablo Isla’s last year

Pablo Isla, president of Inditex. / Reuters

The figure is 11% below pre-pandemic earnings. Sales grow 36% to 27,716 million euros and the online channel already accounts for 25.5% of the total

Clara Dawn

CLEAR DAWN Arteixo (La Coruna)

Inditex leaves the crisis behind with a record profit in the last financial year (from February 1, 2021 to January 31, 2022) of 3,243 million euros, 193% more than in 2020, a year marked by the pandemic, and at the gates to fully recover the 3,639 million of 2019.

The figure for the year as a whole, Pablo Isla’s last at the helm of the company, was marked by a first quarter in which the complex health situation prevented the group from operating in 24% of business hours. But the sales data show that the worst of those months is behind us. Specifically, revenues stood at 27,716 million euros, 35.8% more, although still some 500 million below 2019, when the group reached record sales.

From Inditex they recall that, at a constant exchange rate, these revenues are 3% higher than those of 2019 (-2% from an accounting point of view).

In any case, the historical revenue and profit figures that the company achieved in the third quarter of the year were notably impacted by the omicron variant, which imposed “a sudden drop in commercial traffic in stores”, in addition to restrictions in numerous markets with temporary closures in Austria, the Netherlands, Germany, Japan, China and the Philippines.

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Inditex puts the extraordinary impact of this situation at 400 million euros. “Due to the rapid drop in store sales, it was difficult to offset the incremental expenses associated with the Christmas campaign and the additional expenses due to increased online activity,” they explain from the company. Thus, net profit for the fourth quarter was around 743 million euros, 40% less than in the third.

online recovery

After that period of worse performance as a result of omicron, the group highlights that the spring/summer 2022 campaign is already showing “previous positive patterns” again. “After two years of the pandemic, these results demonstrate the great capacity to adapt to any circumstance that characterizes the people who make up this company through commitment and talent,” Pablo Isla said in a statement.

For his part, the CEO, Óscar García Maceiras, explains that “the company’s leadership in the deep digital transformation of these years places us in an unbeatable position for the future to offer the best experience in our quality fashion proposal and sustainable”.

And it is that online sales grew to 7,491 million euros, which implies 14% more in 2021 on the notable increase of 77% that was experienced during the pandemic. In total, the online channel already accounts for 25.5% of total sales, with the goal that by 2024 that percentage will rise to 30%.

Dividends and Russia

With these figures on the table, and a net financial position that grew by 24% with almost 7,400 million in cash, the Inditex board of directors has been able to clear up one of the great unknowns of the market, by confirming that at its next shareholders’ meeting will propose a dividend of 0.93 euros per share. The figure represents 33% more than in 2020, and will be divided between an ordinary dividend of 0.63 euros and an extraordinary dividend of 0.30 euros per share. Payment will be made in two parts. The first, on May 2 (0.465 euros) this year and the next (another 0.465 euros), on November 2.

Additionally, the board has agreed to establish an extraordinary dividend of 0.40 euros per share for the year 2022, which will be added to the ordinary dividend to be distributed throughout the year 2023.

In addition to the new dividend policy, another of the great unknowns of the market -which in recent weeks has severely punished the first Spanish listed company by market capitalization- is what will happen to its activity in Russia, after deciding on March 5 the temporary suspension of its activity in the country.

Isla is expected to rule on the matter during the presentation of accounts to analysts and the media, but the data shows the strong presence of the group in the region. “Sales in store and online between February 1 and March 13 grew by 33% compared to the same period in 2021 and 21% compared to the pre-Covid record highs of 2019. In this period, sales of the The Russian Federation and the Ukraine accounted for approximately 5 percentage points of sales growth,” they indicate from the company.

Pablo Isla will leave the presidency of Inditex on March 31, when Marta Ortega, daughter of the company’s founder, Amancio Ortega, assumes the reins of the company in a non-executive capacity. After her departure, it will be García Maceiras (who has held the position of CEO since the end of November) who will assume control of the group’s management.

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