Inditex posts 7 percent profit growth in FY17

Inditex Group's net sales rose by 9percent in FY17 to 25.34 billion euros (6.61 billion dollars), underpinned by growth in all of the geographic regions where the group does business. In local currencies, sales growth was 10 percent in 2017. Like-for-like sales rose by 5 percent, with all geographies and all brands delivering growth by this measure. Since the year-end, store sales in local currencies increased by 9 percent between February 1 and March 11, 2018. EBITDA increased by 4 percent or 8 percent constant currency basis to 5.3 billion euros (6.5 billion dollars), while EBIT reached 4.3 billion dollars, 7 percent or 12 percent higher in local currencies. Net profit amounted to 3.37 billion euros (4.17 billion dollars), marking year-on-year growth of 7 percent.

Commenting on the results, Chairman and CEO of Inditex, Pablo Isla, said in a media release: "The unique strength of our integrated stores and online model and its significant growth potential, the prescient investments made in technology and logistics in recent years, coupled with space optimization, mean the company is well placed for continued growth across all its markets."

Inditex appoints new Chief Operating Officer

The company has also announced that Carlos Crespo has being appointed to the new position of Chief Operating Officer (COO), in charge of the coordination of IT, logistics and transport, works, procurement, and sustainability departments. He will report directly to Isla, and will focus primarily on the digital transformation of the company and reinforcing the group's integrated store and online business model.

Crespo was formerly the group's internal audit director. Paula Mouzo, previously internal audit deputy director, has been appointed as new Internal Audit director to replace Crespo.

Meanwhile, Inditex's board of directors will propose a payment of a 0.75 euros (0.93 dollar) per-share dividend, marking year-on-year growth of 10.3 percent, at the annual general meeting scheduled for July. An interim dividend of 0.375 euros per share will be paid out on May 2, 2018, and the remaining 0.375 euro per share would be paid out, on November 2, 2018 in the form of a final and special dividend.

Inditex continues to expand online and offline presence

The revenue from online sales increased by 41 percent, to account for 10 percent in 2017. During the year Inditex expanded its online reach by launching Zara online platform in India, Malaysia, Singapore, Thailand and Vietnam, with the brand's online store due to go live in Australia and New Zealand today. Bershka, meanwhile, launched its e-commerce platform in the US, Japan and South Korea, where Oysho also inaugurated its online store.

In FY17, the group opened 524 new stores in 58 markets. In line with the streamlining strategy announced five years ago, net openings were 183 stores once smaller stores replaced or absorbed by larger stores are taken into account. In parallel it carried out major expansion work at another 144 stores and thoroughly refurbished a further 122. As a result, the group ended FY17 with 7,475 stores and one new market: Belarus.

Picture:Zara UK website