Spanish clothing giant Inditex, owner of the Zara brand, posted a sharply higher profit last year, but still fell short of expectations, due to a drop in activity linked to the Omicron variant in the last quarter.
The world leader in clothing generated 3.24 billion euros in profits in its staggered financial year, which ended on January 31, 2022, almost three times the figure for 2020 (1.1 billion), strongly affected by the Covid-19 epidemic.
Its turnover meanwhile climbed by 36% to reach 27.7 billion euros, once morest 20.4 billion in 2020. Online sales increased by 14%, to reach a quarter of the group’s total sales. textile, specifies the group in a press release.
These results are nevertheless lower than the forecasts of analysts polled by the financial information provider Factset, who expected 3.7 billion in profit and 28 billion in turnover on average.
Inditex explains this difference by the impact of the Omicron variant, which “significantly affected the commercial activity” of the company at the end of 2021, with temporary store closures in several countries.
“The fall in store sales caused an extraordinary impact of 400 million euros in the fourth quarter”, a period marked by an increase in expenses “associated with the Christmas campaign”, underlines the ready-to-wear group in a communicated.
“After the drop in cases of Omicron variants”, sales regained “a positive dynamic” on the occasion of the “start of the spring / summer 2022 campaign”, he nevertheless assures.
Inditex had seen its profits plunge in 2020 due to the health crisis, which had forced it to close 90% of its stores during the first half of the year. It then returned to its pre-crisis level of activity, thanks to the economic recovery.
The textile group, which brings together eight ready-to-wear brands, including Stradivarius, Bershka and Massimo Dutti, might however suffer once more this year, due to the impact of the war in Ukraine and the sanctions imposed once morest Russia.
The leader in inexpensive fashion announced in early March the suspension of its activity in its 502 stores and on its online shopping sites in Russia, one of its main markets in the world following Spain.
The group does not specify what the impact of this decision will be on its sales. But according to analysts, it should significantly reduce the results of the company, which achieves nearly 10% of its sales and 8.5% of its operating profit in Russia.
This article has been published automatically. Sources: ats / awp / afp
