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Translated by
Nicola Mira
Aug 31, 2022
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Inditex avoids price hikes but sales growth set to slow down in Q2

Translated by
Nicola Mira
Aug 31, 2022

Spanish textile giant Inditex will continue to climb back to previous sales levels despite a worsening macroeconomic climate and a scenario of “high and lasting” inflation, according to forecasts made by various analysts for the group’s Q2 (May-July) results.


The multinational led by Marta Ortega has avoided as predicted to apply selective price hikes, and is keeping a close eye on energy and raw material expenses, although analysts for Renta4banco expect rather moderate revenue growth, with a rise of up to 9.7% over Q2 2021.

Analysts are predicting that the group’s Q2 2022 results, due to be published on September 14, will show an increase in sales of 11% over to the same period in 2019. The group has been notably bolstered by the highly positive results recorded in the first month of the quarter (ending on June 5), when it posted a 17% sales rise year-on-year.

In the same vein, Inditex has already pointed out that its Spring/Summer collections have been very well received by clients, highlighting the 13% increase recorded in the last two weeks of May over the same period in 2021.

Spanish financial website Inversión.es pointed out that, in its last report, Inditex published working capital figures showing a 57% upturn, “thanks to a strong performance, with a high-quality inventory growing by 27% and covering possible supply chain tensions.”

Another factor to take into account for this quarter and beyond is the group's net cash position, which improved by 28% between February and April, reaching €9.189 billion.

This financial position “augurs well for the coming quarters, giving the group strong leverage for its expansion plans,” added Inversión.es.

Bankinter experts too have forecast an improvement in Inditex’s “value tone” on its markets, due to the expected rebound in tourism flows and socialization activities, resulting in higher apparel demand.

They added that the prospect of reduced Covid restrictions in China “will improve [Inditex’s] value tone in the short-term.”

Analysts have stressed that Inditex’s upcoming Q2 results will be the first without the contribution of the Russian and Ukrainian markets.

In Q1 2022, Inditex generated a net profit of €760 million (up 80%), including a provision of €216 million for the group's estimated expenditure in Ukraine and Russia for the entire 2022 financial year.

Without that provision, net profit would have reached €940 million.

In Q1, total revenue for the group's brands, among them Zara, Massimo Dutti and Pull&Bear, was worth €6.742 billion, 36% higher than in Q1 2021.

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