Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Inditex third-quarter sales rise despite cost inflation, Russian operations charge

Published 12/14/2022, 05:02 PM
Updated 12/14/2022, 05:02 PM
© Reuters.

© Reuters.

By Scott Kanowsky 

Investing.com -- Industria de Diseno Textil SA (BME:ITX) reported a double-digit increase in third-quarter sales, as the Spanish retail giant was boosted by a jump in online and in-store demand that helped offset higher input expenses and an extra charge from the termination of its Russian operations.

Sales during the three months to October 31 rose by 11% to €8.2 billion (€1 = $1.0635), which the Zara owner partly credited to in-store traffic that ticked up "markedly." Online sales continue to progress "satisfactorily," Inditex added. Net sales bumped up by 19% over the nine-month period to €23.06B, marginally topping estimates.

But the cost of accruing its clothing goods also ticked up by 13% to €3.2B, in a sign of inflationary pressures that have contributed to what chief executive Oscar García Maceiras called a "current challenging context." However, the group said its cost controls remained "rigorous."

The company booked a charge of €14M in the third quarter as well, adding on to a prior expense of €216M recorded in the first three-month period of the fiscal year. In a statement, Inditex said it estimates that the charge "sufficiently covers the impact" from the winding down of its business activities in Russia following the outbreak of the war in Ukraine.

Net income during the three-month period came in at €1.3B. Meanwhile, the figure moved up by 24% to €3.11B over the nine-month timeframe, slightly ahead of Bloomberg consensus estimates.

Meanwhile, the group's autumn/winter collections have been "very well received," with that demand helping push sales higher by 12% to begin fourth-quarter trading from November 1 to December 8.

Analysts at Jefferies said in a note to clients that the third-quarter results were "upbeat" and described fourth-quarter returns as "very strong" so far.

Shares in Inditex rose in early trading on Wednesday.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.