Inditex, the world’s largest fashion retail group, has presented half-yearly results that show - in the words of Pablo Isla, CEO of the company - that its “competitive position is stronger than ever.” The group’s shares have swept the stock market, reaching highs not seen since 2012.
Earnings before interest, taxes, depreciation and amortization (EBITDA) increased 109 percent to 3,100 million euros, closed to 3,400 million reported in 2019. “Inditex’s competitive position is stronger than ever,” said Inditex´ CEO during the meeting with analysts that took place this Wednesday after the company´s presentation of financial results.
Isla has highlighted that “the transformation of the company is accelerating”, in reference to the integration of its online and physical businesses, recalling the importance of this “unique” model for the record figures of sales and profits achieved by the group during the first six months of 2021.
Emily Salter, Senior Analyst at Global Data, shared a similar point of view, stating in a market note that Inditex has taken “innovative steps to integrate its digital and physical channels to improve the shopping experience.”
Inditex’s integrated business plans “go from strength to strength”
“Our operating performance has gone from strength to strength, and we witnessed record highs in the second quarter,” said Pablo Isla during a call with analysts. He also highlighted the good performance of Inditex Open Platform, an integrated inventory management system that links retail stores with their designated websites, in addition to facilitating exchanges and returns for customers.
Isla said platform integration was progressing and operating a single, simplified inventory system had been a “great help” during the pandemic. According to the company, the implementation of this system has been carried out by 95 percent.
In the not too distant future, Zara customers will be able to identify themselves by means of a QR code that will allow them to pay digitally and order, collect and return their purchases both in store and through the web and mobile application.
The online channel, unstoppable
Inditex’s online sales increased 36 percent in the first half compared to the same period of 2020, largely reinforced by closures motivated by efforts to curb the coronavirus pandemic in key markets for the group such as Great Britain, Germany and France.
For the remainder of the current fiscal year, Inditex expects its online sales to represent more than 25 percent of total sales in 2021.
Bankinter´s expert Elena Fernández-Trapiella said to this point that “Once the restrictions have been lifted, the growth prospects are positive in an environment that is back to normal and renewed hunger for fashion.” She also added that Inditex’s 2020-2022 strategic plan will generate higher profitability and lower capital intensity.
Image: Zara Spain, official web