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Inditex reported more gains in the third quarter: its sales growth in constant currency matured 21% from the previous year.
Spanish corporation Inditex has seen significant gains in revenue, profit, and cash for the second consecutive quarter. The latest earnings (Q3 2021) result shows a record level in revenue, profit, and cash for Inditex’s second consecutive quarter. The company announced that its revenue in the first nine months of 2021 surged 40% year-on-year to 11.4 billion euros. The same goes for its gross margin, net income, and sales. Specifically in the third quarter in 2021 climbed 21% compared to Q3 2020 and 10% compared to the third quarter in 2019.
In the nine-month period, Inditex said its gross margin grew 59%, up 101bps in addition to other gains. Moving forward, the company is expecting to continue seeing constant gains, specifically a gross margin of about 57.5% in its fiscal 2021. Excited about the positive performance Inditex has been recording over the past months, executive chairman Pablo Isla commented:
“These results are very satisfactory and demonstrate once again the solidify of our business model, the quality and commitment of our teams, and the potential being realised by our strategy of fully integrating stores and online.”
In addition to the impressive jump in gross margin over the period, Inditex also saw gains in its net income. Net income climbed 273% to 2.5 billion euros while earnings per share (EPS) advanced to 0.803 euros. Furthermore, the Spanish company noted that its net sales pumped 37% to 19.3 billion euros year-on-year.
Inditex Records Gains in Second Consecutive Quarter
Another Inditex executive, Oscar Garcia Maceiras, the Group’s chief executive officer, also emphasized the significant gains the company has been accomplishing. He said the remarkable results “confirm the significance of extending, deepening and developing our integrated business model, the company’s key differentiating characteristic.”
While sales in constant currency increased 39% in a year, sales growth in constant currency also grew in Q3. Inditex reported more gains in the third quarter: its sales growth in constant currency matured 21% from the previous year. Also, online sales growth in local currencies was 28% between January and September 2021. This signifies a 124% gain over the growth recorded in the first nine months of 2019.
Additionally, EBIT summed 3.3 billion euros, representing a 248% jump over the previous year. EBITDA, on the other hand, spiked 63%, amounting to 5.43 billion euros. Inditex also has the backing of strong cash generation which supports its net cash position. Its net cash position also reached a fresh record at 9.57 billion at the end of October.
Inditex is always making plans for expansions which is helping the business to grow further. During the pandemic, the company revealed plans to invest 2.7 billion euros in e-commerce operations. The money was worth about $3 billion at the time. Despite seeing losses during the period, Inditex said that it would expand its e-commerce operation sin Zara, Bershka, and some other business arms.