Zara Reports Strong Sales in First Half of the Year

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Zara owner Inditex has exceeded market expectations with its first-half sales, driven by a solid performance both online and in stores. The Spanish fashion powerhouse, which also owns popular brands like Bershka, Massimo Dutti, and Pull&Bear, has reported a net profit of €2.51 billion ($2.70 billion) for the six months ended July 31, a significant increase from €1.79 billion last year.

In terms of sales, Inditex generated €16.85 billion during this period, surpassing the €14.85 billion recorded in the corresponding period in the previous year. Analysts had predicted first-half sales of €16.68 billion, as indicated by a poll of estimates compiled by FactSet.

Inditex’s earnings before interest and taxes rose to €3.16 billion in the first half, compared to €2.43 billion in the same period last year. Similarly, earnings before interest, taxes, depreciation, and amortization increased to €4.66 billion from €4.03 billion.

The company stated that it experienced an operating margin growth from 16.4% to 18.8%, while the gross margin reached 58.2%.

Inditex maintains its outlook for the full year, anticipating a stable gross margin with a deviation of plus or minus 50 basis points.

These impressive results come as Inditex continues to stay ahead of its competitors in a challenging business landscape. AB Foods, the parent company of Primark, recently revised upwards its forecast for 2023, indicating an expected increase in profitability for its sugar and clothing-retail divisions despite a difficult macroeconomic environment. Meanwhile, H&M Hennes & Mauritz, headquartered in Stockholm, is scheduled to release its sales report on Friday.

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