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Inditex H1 net profit grows 8 percent, sales up 11 percent

By Prachi Singh

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Business

Inditex’s net sales during the first half of 2016 increased by 11 percent to 10.47 billion euros (11.6 billion dollars), with positive growth in all geographical areas where the Group is present. Sales in local currencies grew 16 percent. Net profit increased 8 percent to 1.25 billion euros. Like-for-like sales grew by 11 percent, on top of 7 percent growth over the same period in 2015.

Commenting on the positive first half, Inditex’s Chairman and Chief Executive, Pablo Isla, said, “Both our online and bricks-and-mortar stores are seamlessly connected, driven by platforms such as mobile payment, and other technological initiatives that we will continue to develop”.

Retail expansion - Highlight of the first half

All of the Group’s brands increased their international presence during the period, with 83 new stores in 38 countries. This takes the Group’s total number of stores to 7,096. Following the launch of Zara in Vietnam in the third quarter, the Group now has a presence in 92 markets, 40 of which also boast online stores. During the period, the Group ventured into three new markets– Aruba, Nicaragua and Paraguay.

The new Zara store opened on calle Compostela in A Coruña, Spain on September 1, located close to the Group’s headquarters. This new opening was accompanied by other significant new stores, including in Soho, New York, in the United States, or the Group’s first stores in Aruba and Nicaragua. Zara has opened stores in markets such as China, Canada, Thailand, Saudi Arabia, Germany, Mexico, Indonesia and Japan. There has also been significant expansion work to stores in Puerto Rico, Cologne (Germany) and Antwerp (Belgium). On September 8th, Zara also added its first store in Vietnam in Ho Chi Minh City. The brand is now set to launch in Auckland, New Zealand during the first week of October.

Pull&Bear has opened its new headquarters in Narón, Spain. It has also continued to update its store concept California, starting with the opening of the brand’s store on Calle Hermosilla, Madrid, in November of last year. Also the brand’s new stores opened in Russia, Luxembourg and Austria, along with openings in another 20 countries including Mexico, the United Kingdom, Italy, France, Nicaragua, Jordan and China.

Massimo Dutti launched in India with its store in New Delhi’s Citywalk shopping centre. Its new store concept has been implemented in the recently launched stores on Xiangyin Road in Shanghai, China; Buchanan Street in Glasgow, United Kingdom; Pacific Centre in Vancouver, Canada; and Kutuzovsky Prospekt in Moscow, Russia. It has also been used in new stores in France, Switzerland, South Korea, Taiwan, Germany and Italy.

Recent financial development

Between August 1 and September 18, 2016, sales in local currencies in stores and online have grown 13 percent. In line with the proposal approved by the Shareholders’ Meeting held on July 19, on November 2, 2016 payment will be made of the ordinary supplementary dividend and extraordinary dividend, to a total gross sum of 0.30 euro (0.33 dollars) per share. This gives a total dividend of 0.60 euros (0.67 dollars) per share corresponding to the financial year 2015.

Picture:Inditex/Pull & Bear

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