MADRID: The owner of fashion retailer Zara, Inditex, returned to quarterly profit in the three months from May to July despite a 31% fall in sales as the coronavirus crisis kept consumers away from city centre shopping districts.
Inditex, which also owns the Massimo Dutti and Bershka brands, said 98% of its stores had reopened and that current trade showed a progressive return to normality with online sales growing sharply and store sales recovering.
In the current quarter, sales in store and online from Aug. 1 to Sept. 6 at constant exchange rates were on an improving trend, though still down 11% from a year earlier.
Inditex shares rose 5% on Wednesday morning, adding to gains booked on Tuesday after Swedish rival H&M beat quarterly profit forecasts.
Shoppers have started to buy fashion again since stores reopened following shutdowns. JP Morgan estimates continental Europe fashion sales were down 15% in July on average compared to May’s 42% drop.
Inditex reported a second-quarter net profit of 214 million euros ($253 million), beating the 96 million euro mean forecast from Refinitiv’s SmartEstimate model, which is weighted towards more recent estimates and higher-ranked analysts.
It saw a 74% jump in online sales in the first half, a trend seen at apparel retailers worldwide, as shoppers bought from home with many stores closed and movement restrictions in place.
It said it would have reported a profit had it not booked a 308 million euro charge related to its integration of its store and online platforms.
($1 = 0.8445 euros)
Source: Reuters, Reporting by Sonya Dowsett, editing by Inti Landauro and Jason Neely