Spain-based fast fashion multinational Inditex, operator of Zara and several other apparel brands, has reported FY2018 results for the period ended 31 January 2019.

  • Sales increased 3% to EUR26.14 billion versus EUR25.33 billion for 2017. Like-for-like sales grew 4%.
  • Online sales grew 27% to EUR3.2 billion in FY2018, with 14% of total sales taking place online and 12% of the total in countries where the retailer has an online and physical presence.
  • Gross profit increased 4% to EUR14.8 billion compared to EUR14.26 billion in 2017. Gross margin increased to 56.7% from 56.3% in 2017.
  • Operating profit (EBIT) for 2018 increased 1% to EUR4.36 billion from EUR4.31 billion in the previous year.
  • Net profit was EUR3.44 billion with a y-o-y growth of 2%.
  • Group capital expenditure was EUR1.62 billion, with a major focus on rolling out RFID technology across all brands and developing fully integrated stock management systems.

Stores and Online:

  • The retailer ended the year with 7,490 stores in 96 markets. Net openings for 2018 was 15 stores.
  • Zara’s presence has expanded to 202 markets, Massimo Dutti’s presence expanded to 184 markets while Uterqüe’s presence has reached to 148 markets.
  • The average store size of new openings has increased by 39% as compared to openings in 2012. New Zara stores now span over 2,184sm2 versus 1,452m2 in 2012.
  • In November 2018, the retailer launched the Zara global online store in 106 markets where it does not have any physical stores.
  • Zara updated its website interface and mobile application adding features to facilitate smoother browsing and viewing.

Services:

  • The retailer extended delivery services such as same-day delivery and next-day delivery to a selected range of cities across globe, with an aim to roll it out across all markets. 

 Outlook 2019:

  • The retailer estimates like-for-like sales growth of 4%-6% for FY2019.
  • All the Inditex brands will be available online worldwide by 2020.
  • Zara plans to introduce its integrated platform with the launch of online sales from the spring season in the United Arab Emirates, Dubai, Saudi Arabia, Egypt, Indonesia, Israel, Lebanon, Morocco, Serbia, South Africa and Ukraine.

Source: Inditex