Industria de Diseño Textil SA or Inditex Wednesday reported significantly higher earnings in its nine-month period with strong sales growth. The Spanish fashion retailer also said its standalone third-quarter net profit, EBITDA and revenue reached all-time record levels. In the morning trading in Spain, Inditex shares were losing around 3 percent.
Looking ahead for fiscal 2021, the company now projects a gross margin of around 57.5 percent, plus or minus 50 basis points. In 2020, the gross margin reached 55.8 percent on a reported basis, and 57.6 percent in constant currency.
Inditex also expects online sales to account for more than 25 percent of total revenue in the year.
Regarding the current trading, the company noted that store and online sales in local currencies between November 1 and December 10 increased 33 percent year-on-year and 10 percent compared to the same period in 2019.
Chief executive officer, Óscar García Maceiras, stressed the importance of these results at this time, as they “confirm the significance of extending, deepening and developing our integrated business model, the company’s key differentiating characteristic”.
In the third quarter, Inditex said its revenue, in local currencies, registered growth of 21 percent from last year and 10 percent when compared with the third quarter in 2019. In-store sales continued to strengthen throughout the third quarter. In local currency terms, instore revenue topped that of 3Q19, despite 11 percent fewer stores.
In the first nine months of fiscal 2021, the company’s net profit attributable to the controlling company surged 273 percent to 2.5 billion euros from last year’s 671 million euros.
Earnings per share were 0.803 euros, up from 0.215 euros a year ago.
EBIT amounted to 3.3 billion euros, up 248 percent year-over-year, and EBITDA totaled 5.43 billion euros, up 63 percent from last year. EBITDA margin was 28.1 percent, up from 23.7 percent a year ago. The gross margin reached 59 percent, higher than 58 percent a year ago.
Revenue in the first nine months amounted to 19.33 billion euros, 37 percent higher than last year’s 14.09 billion euros.
Online sales in local currencies registered year-on-year growth of 28 percent and growth of 124 percent against the same period in pre-pandemic 2019.
As of the October close, the company had 6,657 stores, having opened 179 new stores in 39 markets during the nine months period.
In Spain, Inditex shares were trading at 27.98 euros, down 3.32 percent.
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